Securities and Exchange Commission Awards More than $2.5 Million to Joint Whistleblowers
On September 1st, 2020, the Securities and Exchange Commission (SEC) released a public statement confirming that more than $2.5 million in compensation has been awarded to joint whistleblowers. The award is the 92nd in the history of the program. Approximately $510 million in whistleblower compensation has now been awarded by the agency. This whistleblower award is unusual because the joint whistleblowers were fully independent—they were not connected to the companies. Below, our Miami investment fraud attorneys provide a more detailed overview of the decision and the unique issues it involves.
Detailed Tip Led to Multiple Successful Enforcement Actions
In its order (Whistleblower Award Proceeding File No. 2020-28), the SEC noted that the joint whistleblowers provided critically important information to the federal regulatory agencies. As the information led to successful enforcement action (in this case, multiple enforcement actions), the whistleblowers were eligible for financial compensation.
What is notable about this case is that the whistleblowers were outsiders. They were neither employed by or affiliated with the company that federal regulators took enforcement action against. Instead, they were independent financial experts who voluntarily came for and submitted detailed analysis to the Securities and Exchange Commission.
SEC Regulations: Independent Analysis Can Warrant Whistleblower Compensation
When you think of the concept whistle blowing, you probably think of a corporate insider who comes forward with non-public evidence or information of wrongdoing. There is good reason that your mind makes such an assumption: Most whistleblowers are employed by or affiliated with the company/investment entity that they are informed upon.
That being said, there is no legal requirement that an SEC whistleblower must be a corporate insider. They do not even need to be connected to the wrongdoer in any manner. Quite the contrary, any person who has relevant information can blow the whistle on wrongdoing. A whistleblower is simply defined as someone who informs on illicit activity.
In this case, the disclosure was made by outsiders who conducted their own unique, independent analysis and submitted a detailed assessment to federal authorities. As the Chief of the Office of the Whistleblower noted in approving the whistleblower award, the SEC is committed to “awarding individuals who provide high quality independent analysis.”
The takeaway: Any person who has relevant information, even if discovered through their own unique analysis, has the right to make a protected disclosure to the SEC. If their analysis results in successful enforcement action, they may be granted financial compensation for protecting investor rights.
Call Our Florida SEC Whistleblower Lawyers for Immediate Help
At Carlson & Associates, P.A., we are experienced and effective advocates for our clients. Our securities law whistleblower attorneys are standing by, ready to protect you and help you find the right path forward. To arrange a completely confidential review of your claim, please give us a call today. Our law firm represents securities industry whistleblowers in Miami and throughout Florida. We can help you make a confidential disclosure to federal authorities.
Resources:
sec.gov/rules/other/2020/34-89721.pdf
https://www.sec.gov/news/press-release/2020-201