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SEC Starts New Year By Issuing Several Whistleblower Awards

On January 7th, 2021, the Securities and Exchange Commission (SEC) kicked off 2021 by issuing five new whistleblower cases. Three of the awards are related to a similar underlying case and the other two pertain to separate matters. The SEC’s whistleblower program is designed to incentivize securities insiders and other knowledgeable people to disclose fraud to authorities. Here, our Miami investment fraud attorneys provide an overview of the federal agency’s most recent awards. 

SEC Whistleblower Award: $500,000 in Compensation to Three Whistleblowers 

In its first whistleblower award of 2021, the SEC awarded a collective $500,000 in financial compensation to three whistleblowers who collectively provided material information that helped the agency to take enforcement action. One individual came forward with the initial tip that allowed the SEC to open its investigation. The other two whistleblowers provide additional important details that “significantly contributed” the success of the enforcement action. As all three of these whistleblowers were awarded financial compensation in relation to the same underlying fraud case, the agency addressed their claims through a joint final award.

SEC Whistleblower Award: $600,000 in Compensation to a Whistleblower 

In the SEC’s second whistleblower award order in 2021, the agency granted $600,000 in financial compensation to an anonymous individual who provided information that both allowed the agency to open an investigation and fill in the key details it needed to take enforcement action. Among other things, the SEC credits this whistleblower with:

  • Meeting investigators in-person;
  • Turning over material documents and records; and
  • Identifying other witnesses of the fraud.

Based in large part on the assistance provided by the whistleblower, the SEC was able to take enforcement action, stop securities fraud, and return money to affected investors. Similar to all other SEC whistleblowers, this individual’s identity will not be disclosed to the public. The SEC stresses the importance of anonymity for securities industry whistleblowers. 

SEC Whistleblower Award: $100,000 in Compensation to a Whistleblower 

In its third whistleblower award of 2021, the SEC granted $100,000 in financial compensation to an individual who was not a securities industry insider. In this case, the whistleblower brought a fully independent analysis to the agency that, eventually, led to enforcement action. Notably, the individual used public documents to prove that the company’s some key details in a company’s financial disclosures were simply impossible. Although the majority of SEC whistleblower awards are granted to professionals with insider information of securities fraud, an independent analysis will also warrant compensation if it leads to successful enforcement action.

Schedule a Confidential Consultation With an SEC Whistleblower Attorney in Florida

At ​Carlson & Associates, P.A., our Florida securities industry whistleblower lawyers provide trustworthy, results-focused legal advocacy. If you are preparing to disclose sensitive information to the SEC, we will protect your rights. Call our Miami office now for a strictly private review and evaluation of your case. We represent securities industry insiders and other professionals in whistleblower claims throughout Florida.

Resource:

sec.gov/news/press-release/2021-2

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