Joint whistleblowers will be receiving an award of about $6 million from the Securities and Exchange Commission for their assistance, the SEC announced.
The whistleblowers were credited with providing new information that led to the opening of an examination and giving investigators a roadmap that resulted in a successful enforcement action.
“Today’s award illustrates that the agency can leverage whistleblower information in various ways, including by prompting an examination,” said Jonathan Carr, Acting Chief of the SEC’s Office of the Whistleblower. “If that examination ultimately results in an enforcement action, the whistleblower may be eligible for an award.”
The SEC said it considered the following factors in determining this whistleblower award:
“(1) the significance of information provided; (2) the assistance provided; (3) the law enforcement interest in deterring violations by granting awards; (4) participation in internal compliance systems; (5) culpability; (6) unreasonable reporting delay; and (7) interference with internal compliance and reporting systems.”
Created by Congress under the Dodd-Frank Act of 2010, the whistleblower program is financed entirely through monetary sanctions paid to the SEC by securities law violators. 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, which can range from 10 to 30 percent of the money collected when the sanctions exceed $1 million. The confidentiality of all whistleblowers is protected by the SEC, and no information is disclosed that could reveal their identity. No money has been taken or withheld from harmed investors to pay whistleblower awards.
During the 2024 fiscal year, the SEC issued whistleblower awards totaling $255 million. 45,130 tips, complaints, and referrals were received, the most ever in one year, including more than 24,000 whistleblower tips, more than 14,000 of which were submitted by two individuals.
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.
