SEC Announces First Whistleblower Awards of 2019

Posted on March 27, 2019, by Mary P. Hansen and Jessie D. Shields in Dodd-Frank, Whistleblower. Comments Off on SEC Announces First Whistleblower Awards of 2019

The SEC announced yesterday that it has awarded more than $50 million to two whistleblowers—specifically, more than $37 million to one whistleblower and more than $13 million to the other. Press Rel. No. 2019-42 These are the first awards announced in 2019, and the first awards announced in more than six months. The $37 million award now ranks as the SEC’s third largest award to date. The two largest awards ($50 million and $39 million) were announced in 2018.

The more than $37 million was awarded to a whistleblower whom the Commission found, as stated in its Order, to have voluntarily provided information that was “highly significant and critical to the success” of the underlying investigations. Indeed, the Commission’s enforcement staff opened a second investigation after meeting with the whistleblower on two separate occasions. The whistleblower continued to meet with enforcement staff as part of the second investigation and provided critical information and documentation that the Commission described as “akin to ‘smoking gun’ evidence.” The Commission also noted that the whistleblower “acted swiftly in reporting” information.

The more than $13 million was awarded to a whistleblower who also voluntarily provided original information by submitting an online tip, however, the Commission found that this whistleblower “unreasonably delayed in reporting the information . . . during which time investors were continuing to suffer harm and the disgorgements amounts upon which [this whistleblower’s] award will be based were growing.” The Commission also found that the whistleblower “financially benefited” from this delay. This implies that the whistleblower’s award might have been greater had they reported their firm’s misconduct more quickly.

According to the press release, the agency has “now awarded approximately $376 million to 61 individuals since issuing its first award in 2012.” But over half of the dollars awarded to qualifying whistleblowers have been awarded in 2018 and 2019. In 2018 alone, the SEC announced awards to nine whistleblowers that totaled more than $146 million. 2018 Annual Report. Four of those awards join the ranks of the SEC’s ten highest awards paid since the inception of the whistleblower program. SEC Top Ten Awards.  

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