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With A $110 Million Award, SEC Passes $1 Billion In Total Whistleblower Compensation

On September 15th, 2021, the Securities and Exchange Commission (SEC) announced two new whistleblower awards—a $110 million award and a $4 million award, both connected to the same underlying enforcement action. With the latest awards, the SEC has now approved more than $1 billion in whistleblower compensation. Notably, nearly half of the compensation paid in the history of the program was granted within the past twelve months. In this blog post, our Miami investment fraud lawyers discuss the latest award and the history of the agency’s whistleblower compensation program.

A Nine Figure Award for Whistleblower Who Helped Spur Enforcement Action 

The SEC whistleblower program exists to provide an additional financial incentive to encourage employees and other securities industry insiders to report misconduct. When the agency grants a whistleblower award, it only publishes a limited amount of information to the public—thereby helping to ensure that the personal identifying information of the whistleblower is kept confidential.

In this case, the SEC found that the whistleblower who was granted a $110 million award voluntarily provided original information that was instrumental to federal enforcement that helped stop securities fraud and protect investors. Notably, the $110 million whistleblower award is the second largest in the history of the federal program—standing only behind a $114 million award that the agency approved in October of 2020.

The SEC Whistleblower Program has Surpassed $1 Billion 

Passed into law as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the SEC whistleblower program officially took effect in July of 2010. The program recently passed its eleven year anniversary. With the two latest awards in a related enforcement action, the federal securities regulator has now approved whistleblower compensation to 207 different individuals. Many whistleblowers are insiders are companies or organizations—but that is not required by law. In total, more than $1 billion has been awarded to people who have helped stop securities fraud by providing original information to the SEC.

For a whistleblower award to be approved by the SEC, there must be successful enforcement action. The compensation paid to the whistleblower comes out of a dedicated fund—not the pockets of affected investors. Notably, an individual can make a fully anonymous disclosure to the SEC through a whistleblower lawyer. They can keep their identity confidential to everyone else—even the SEC—up until the point that whistleblower compensation is approved. When a whistleblower award is granted, an individual can still keep their personal identifying information out of the public record. 

Schedule a Confidential Consultation With an SEC Whistleblower in Miami

At ​Carlson & Associates, P.A., our South Florida securities industry whistleblower lawyers have the professional skills and legal expertise that you can rely on to protect your rights. If you are preparing to make a protected disclosure to regulators, we are available to help. Call us now or connect with us directly through our website to arrange a completely confidential initial consultation. From our Miami office, we represent investors throughout the whole region.

Resource:

sec.gov/news/press-release/2021-177

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