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SEC awards joint whistleblowers $3 million

The Securities and Exchange Commission awarded two whistleblowers $3 million Monday for providing a tip that led to a “successful enforcement action involving an alleged securities law violation that impacted retail investors.”

The two whistleblowers submitted their tip jointly and will share the $3 million award.

“In this case, the whistleblowers also undertook significant and timely steps to have their employer remediate the harm caused by the alleged violations,” the SEC said.

In its award order (pdf), the SEC said the whistleblowers didn’t provide information “voluntarily.” Another agency had already requested information from their employer, “asking for a response” from the two whistleblowers.

But the SEC said it used its discretion to waive the “voluntary” requirement and award the whistleblowers money “in light of the unique facts and circumstances of this case.”

Among the unique circumstances, according to the SEC, was that the whistleblowers didn’t know about the information request from the other agency until after they reported their information to the SEC. And the other agency investigated the whistlebowers’ employer because of the whistslebowers’ complaints.

The whistleblowers’ “own remedial efforts, in part, were an indirect cause of the investigation that resulted in the request for information” from them, the award order said.

Jane Norberg, chief of the SEC’s Office of the Whistleblower, said Monday the “whistleblowers showed great tenacity by repeatedly reporting internally and advocating for the firm to disclose the violative conduct and remedy the attendant investor harm.”

The SEC has now awarded more than $384 million to 64 individuals 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 penalties are more than $1 million.


Richard L. Cassin is editor at large of the FCPA Blog.

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