The US Securities and Exchange Commision has awarded $16M to two whistleblowers—$8M each—for the crucial information and help they provided in bringing a successful securities enforcement action. If you consider that a whistleblower may be eligible for 10-30% of funds collected when the monetary sanctions of the SEC action that the individual helped to bring is greater than $1M, the sanctions imposed in this latest case must have been significant.
According to the regulator, one whistleblower reported a “particular misconduct” that became central to the SEC’s enforcement action. The other whistleblower provided additional key information and continued to cooperate with the agency during its probe. The latter’s contributions reportedly saved the Commission time and resources.
These latest awards bring the amount awarded to SEC whistleblowers—49 of them—to over $175M. Alleged wrongdoers accused in the regulators’ cases have been ordered to pay $1B in financial remedies, including over $671M in disgorgement.
Other whistleblower awards granted in 2017:
· Over $1M to one individual who provided “substantial” documentation and information regarding one registered entity’s violation of a securities law that affected retail cusomters.
· More than $1.7M to a company insider who helped stop a fraud that would have been difficult to identify. Millions of dollars were restored to investors.
· Almost $2.5M to a domestic government agency employee whose tip and ongoing help led to a successful SEC probe.
· Over $500K to a company insider who reported “well-hidden misconduct.”
· Close to $4M to a whistleblower who provided the agency with specifics about a serious misconduct.
· Over $7M to three individuals for the part they played in exposing an investment fraud.
· More than $5.5M to one whistleblower for information that led to the SEC exposing a scam.
The decision to turn whistleblower can bring risks, including potential retaliation by an employer in the workplace, such as demotions, harassment, wrongful termination, and other consequences. By law, whistleblowers are supposed to be protected from such harms.
More Blog Posts:
SEC Orders Wells Fargo Advisors to Pay $3.5M Penalty, Institutional Investor Securities Blog, November 13, 2017
Whistleblower Awarded Almost $4M by SEC, Institutional Investor Securities Blog, April 25, 2017
Hedge Funds Get Rid of Puerto Rico General Obligation Bonds After Hurricane Maria, Stockbroker Fraud Blog, November 22, 2017