The Securities and Exchange Commission Thursday announced awards of more than $8 million each to two whistleblowers who helped the SEC bring a successful enforcement action.
The SEC denied awards to five other whistleblowers for the same case. Two of them didn’t file proper claims on time. The others didn’t provide information that helped the SEC, the agency said.
The 20-page redacted award order (pdf) is apparently the longest in an SEC whistleblower case. Lawyers for one of the unsuccessful whistleblowers made “numerous arguments” challenging the SEC’s decision, the order said.
The SEC protects the confidentiality of whistleblowers and doesn’t disclose information that might reveal their identity.
“The first [successful] whistleblower alerted SEC enforcement staff of the particular misconduct that would become the focus of the staff’s investigation and the cornerstone of the agency’s subsequent enforcement action,” the SEC said.
“The second [successful] whistleblower provided additional significant information and ongoing cooperation to the staff during the investigation that saved a substantial amount of time and agency resources.”
The SEC has now awarded more than $175 million to 49 whistleblowers since issuing its first award in 2012.
Whistleblowers can be eligible for an award when they voluntarily provide the SEC with “original, timely, and credible information” that leads to a successful enforcement action.
Awards can range from 10 percent to 30 percent of the money collected when the monetary sanctions exceed $1 million.
So far this year, the SEC has awarded $37.7 million to 11 whistleblowers, according information released by the SEC Office of the Whistleblower.
The award Thursday was the biggest in 2017.
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Richard L. Cassin is the publisher and editor of the FCPA Blog.
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