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SEC awards whistleblower $700,000, denies money to three others

The U.S. Securities and Exchange Commission released an Order Determining Whistleblower Award Claim for more than $700,000 to one person, but denying an award to three other claimants for the same matter.

The award order came last week, following initial recommendations by the SEC staff in June 2015.

The heavily redacted order didn’t identify the claimants or the defendant in the SEC enforcement action. Federal law requires the SEC to protect the identity of whistleblowers.

The successful claimant initially gave the SEC a detailed analysis. But the information was provided “before enactment of the whistleblower award program and, therefore, could not  serve as the basis for an award,” the SEC said.

The claimant resubmitted information to the SEC after Congress enacted the whistleblower award program as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. That submission included new information that “significantly contributed to the successful enforcement of the Covered Action,” the SEC said.

The claimant accepted the SEC’s recommendation for a $700,000 award.

Two other claimants who weren’t awarded anything didn’t contest the SEC’s action.

A fourth claimant who wasn’t awarded anything argued against the decision. The SEC said there was no award because the claimant didn’t provide original information that led to a successful enforcement action.

The SEC whistleblower program started in 2011. Since then, the agency has awarded more than $54 million to 23 whistleblowers “who provided the SEC with unique and useful information that contributed to a successful enforcement action.” 

Whistleblower awards can range from 10 percent to 30 percent of recoveries when amounts collected are more than $1 million.

The biggest award was more than $30 million in 2014. A 2013 award topped $14 million.

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The SEC’s Securities Exchange Act of 1934 Release No.76921 / January 15, 2016 and Whistleblower Award Proceeding File No. 2016-2 are here (pdf).


Richard L. Cassin is the publisher and editor of the FCPA Blog. He can be contacted here.

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