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Harry Cassin
Publisher and Editor

Andy Spalding
Senior Editor

Jessica Tillipman
Senior Editor

Bill Steinman
Senior Editor

Richard L. Cassin
Editor at Large

Elizabeth K. Spahn
Editor Emeritus

Cody Worthington
Contributing Editor

Julie DiMauro
Contributing Editor

Thomas Fox
Contributing Editor

Marc Alain Bohn
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Bill Waite
Contributing Editor

Russell A. Stamets
Contributing Editor

Richard Bistrong
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Eric Carlson
Contributing Editor

SEC awards whistleblower $3.5 million after first denying claim

The Securities and Exchange Commission awarded a whistleblower more than $3.5 million Friday for producing evidence against his or her company during an ongoing investigation “that strengthened the SEC’s case.”

The SEC’s order said the agency denied an award to the whistleblower in January because the informaiton related to an SEC investigation that had already started.

But after the whistleblower appealed in February, the SEC reversed its decision.

Friday’s order said,

After careful consideration of the administrative record, including Claimant’s written response and the additional factual information provided by Enforcement staff, we find that Claimant’s information led to successful enforcement because it significantly contributed to the success of the Covered Action.

In a separate announcement Friday, the SEC said “whistleblowers should be encouraged to come forward and report allegations of potential securities laws violations even if they think the SEC may already be looking into it.”

The agency didn’t identify the whistleblower or the investigation leading to the award.

By law, the SEC has to protect the confidentiality of whistleblowers and not disclose information that might reveal a whistleblower’s identity.

The SEC whistleblower program began in 2011. Since then the agency has awarded more than $62 million to 28 whistleblowers.

From the information released by the SEC Office of the Whistleblower, none of the awards was based on information about FCPA violations.

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

Whistleblowers can be eligible for awards when they voluntarily provide the SEC with “unique and useful information that leads to a successful enforcement action.”

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

In March this year, the SEC paid almost $2 million to three whistleblowers. The biggest award — about $1.8 million — went to one of the whistleblowers.

Last year, the SEC received a record 4,000 whistleblower tips.

The SEC also changed its mind after an appeal by a whistleblower in a 2014 case. In that case, the agency awarded more than $400,000 to a whistleblower who reported a fraud to the SEC after the company failed to address the issue internally.

The SEC staff first recommended denial of an award to the whistleblower, saying the information wasn’t “voluntarily provided.”

The claimant appealed, submitted supporting documents including a chronology, and convinced the SEC that he or she was entitled to an award.


Richard L. Cassin is the publisher and editor of the FCPA Blog. He’ll be the keynote speaker at the FCPA Blog NYC Conference 2016.

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