SEC Awards Over $2 Million to Whistleblower

The Securities and Exchange Commission (SEC) yesterday announced an award of over $2 million to a whistleblower who provided information that led to a successful related action by the U.S. Department of Justice (DOJ).

The whistleblower previously received an award for contributions to an SEC enforcement action based on the same information that supported the award for the related action, and was eligible for the award announced yesterday due to recent amendments clarifying the types of actions that may be considered "related" under the whistleblower rules. The whistleblower's information prompted the opening of investigations by both the SEC and the DOJ. The whistleblower also provided extensive, ongoing assistance to both investigations.

"The SEC's whistleblower rule amendments make clear that non-prosecution and deferred prosecution agreements entered into by the DOJ are related actions upon which whistleblowers may receive awards," said Emily Pasquinelli, Acting Chief of the SEC's Office of the Whistleblower. "Today's award demonstrates the SEC's commitment to award whistleblowers not only for their contributions to a successful SEC enforcement action but also for their contributions to qualifying related actions."

The SEC​ has awarded approximately $1.1 billion to 224 individuals since issuing its first award in 2012. All payments are made out of an investor protection fund established by Congress that is financed entirely through monetary sanctions paid to the SEC by securities law violators. No money has been taken or withheld from harmed investors to pay whistleblower awards. 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. Whistleblower awards can range from 10-30% of the money collected when the monetary sanctions exceed $1 million.