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SEC awards $50 million to two whistleblowers

The Securities and Exchange Commission said Tuesday it awarded two whistleblowers $50 million in the same case. One award was $13 million and the other award was $37 million.

The $37 million award is the SEC’s third-biggest award ever.

The SEC’s biggest whistleblower award was $50 million, shared by two former Merrill Lynch employees in March 2018. A third former Merrill Lynch employee was awarded $33 million in the same case.

The second biggest award was $39 million to a single whistleblower in September 2018.  

Tuesday’s redacted SEC award order (pdf) said the whistleblower awarded $37 million had provided “smoking gun” evidence.

The SEC denied claims submitted by two other whistleblowers in the same case. One of them provided information that wasn’t “original,” the SEC said, and the other didn’t file their claim in a “timely” manner under the whistleblower regulations.

Jane Norberg, chief of the SEC’s Office of the Whistleblower, said in a statement Tuesday: “Whistleblowers like those being awarded today may be the source of ‘smoking gun’ evidence and indispensable assistance that strengthens the agency’s ability to protect investors and the capital markets.”

The SEC has now awarded $376 million to 61 individual whistleblowers since its first award in 2012. 

Awards are paid out of penalties the SEC collects from securities law violators.

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 penalties are more than $1 million.

By law, the SEC protects the confidentiality of whistleblowers and doesn’t disclose information that could reveal a whistleblower’s identity.


Harry Cassin is the publisher and editor of the FCPA Blog.

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