Two whistleblowers have been awarded a total of over $6 million for the assistance they provided to the Securities and Exchange Commission in separate enforcement actions, the SEC announced last week.
One award, of more than $3 million, went to an individual who believed that a product they were being asked to invest in was being misrepresented. After the person alerted the SEC to the potential misconduct, the commission opened an investigation into the matter. The whistleblower continued to cooperate with the SEC’s Enforcement staff during the probe.
The second award, also of over $3 million, was given to an individual described as an insider who provided information that prompted the SEC to launch an investigation. The whistleblower first reported their concerns internally and then submitted a detailed tip. The person provided additional information in multiple meetings with the enforcement staff during the course of the investigation.
“When confronted with potential wrongdoing, today’s whistleblowers refused to look the other way, but instead, chose to do the right thing by reporting it to the SEC,” said Creola Kelly, Chief of the SEC’s Office of the Whistleblower. “Insiders and outsiders alike can make a tremendous impact on the SEC’s ability to detect misconduct and protect investors when they decide to become whistleblowers.”
Created by Congress under the Dodd Frank of 2010, the whistleblower program has awarded about $1.3 billion to 276 individuals since the first award was issued in 2012. Whistleblowers may be eligible for an award when they voluntarily provide the SEC with original, timely, and credible information that leads to a successful enforcement action. The confidentiality of all whistleblowers is protected by the SEC, and no information is disclosed that could reveal their identity.
The SEC reported that fiscal 2021 was a record-breaking year for the whistleblower program with about $564 million awarded to 108 individuals, the largest dollar amount and the most individuals awarded in one fiscal year.
The securities fraud attorneys at Hyman Cotter PC have decades of experience dealing with securities fraud cases and have a deep understanding of how capital markets and financial service firms are intended to work to protect investors. If you think your financial professional or firm engaged in misconduct that caused you investment losses, contact us for a free consultation at 312-291-4600 or through our online contact form.
