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SEC awards $37 million to whistleblower for assistance in enforcement actions

On Behalf of | Jan 4, 2023 | Regulatory Investigations

A whistleblower was awarded $37 million recently by the Securities and Exchange Commission for the assistance they have provided in successful enforcement actions, the SEC announced.

The commission detailed the eligibility for the award in a news release, stating that the individual involved was not only the initial source of a company’s internal investigation but also the source for investigations by the SEC and another agency.

The company reported the alleged conduct to the SEC and another agency but the person who provided the original information was given credit for the investigations because they gave the same information to the SEC within 120 days of giving it to the company.

“The whistleblower here made persistent efforts to bring the conduct to the attention of the SEC, another agency, and the company and is credited with the results of the company’s internal investigation,” said Creola Kelly, Chief of the SEC’s Office of the Whistleblower.

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.  Payments to whistleblowers are made out of an investor protection fund, established by Congress under the Dodd-Frank Act of 2010. The fund is financed entirely through monetary sanctions paid to the SEC by securities law violators. Whistleblower awards can range from 10 to 30 percent of the money collected when the monetary sanctions exceed $1 million. The identity and confidentiality of those who come forward is protected by the SEC.

The 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.