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SEC awards whistleblowers over $4 million for assistance in enforcement actions

On Behalf of | Jan 20, 2022 | Securities and Compliance

Whistleblowers who provided key information to the Securities and Exchange Commission in two separate enforcement actions have been awarded a total of over $4 million, the SEC announced in a news release last week.

This comes on the heels of a record-breaking year for SEC whistleblower payouts.

One of the whistleblowers received about $2.6 million for new information during an existing investigation that helped the SEC detect misconduct occurring overseas. Without the whistleblower’s help, the commission said it would have been difficult to uncover the wrongdoing.

In the second order, the SEC awarded about $1.5 million to joint whistleblowers. These individuals helped the commission carry out a successful action by providing substantial ongoing assistance during the course of the investigation. They provided information about key witnesses during their communications with SEC staff members.

“These whistleblowers provided critical information and continued cooperation that helped the agency detect the securities laws violations,” said Creola Kelly, Chief of the SEC’s Office of the Whistleblower. “These awards highlight the importance of the SEC’s whistleblower program to the agency’s enforcement efforts and to its ability to maximize staff resources.”

Created by Congress under the Dodd Frank of 2010, the whistleblower program has awarded about $1.2 billion to 241 individuals since the first award was issued in 2012. Individuals who voluntarily provide the SEC with original, timely, and credible information that leads to a successful enforcement action may be eligible for a whistleblower award.

The confidentiality of all whistleblowers is protected by the SEC, and no information is disclosed that could reveal their identity. The payments come from an investor protection fund established by Congress that is financed entirely through monetary sanctions paid to the SEC by securities law violators.

The SEC investigations attorneys at Lewitas Hyman include former senior attorneys at the SEC whose legal experience and industry knowledge make them uniquely qualified to provide counsel on securities regulatory, compliance and enforcement matters. Our attorneys fully understand the regulatory scrutiny financial professionals and their firms face from the various regulators that oversee the financial services industry. If your firm is facing an investigation from a regulatory agency, please contact Lewitas Hyman at (888) 655 6002 or through our online contact form.