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Three SEC whistleblowers split $7 million award

The Securities and Exchange Commission Monday awarded more than $7 million to three whistleblowers who helped the agency stop a fraudulent investment scheme.

One whistleblower, an outsider, provided information that led to the start of the SEC’s investigation. The SEC awarded that whistleblower more than $4 million. 

Two other whistleblowers jointly provided more new information during the SEC’s investigation. That information "significantly contributed to the success of the SEC’s enforcement action," the agency said.  The SEC awarded those two whistleblowers more than $3 million to be split between them.

By law, the SEC protects the confidentiality of whistleblowers and doesn't disclose information that might reveal who they are. The SEC Monday released a redacted whistleblower award order (pdf).

The SEC has now awarded $149 million to 41 whistleblowers since the first award in 2012.

The biggest award was more than $30 million in 2014.

The agency made its second biggest award of $22 million in August 2016.

And in November 2016, the SEC awarded more than $20 million to a whistleblower.

Whistleblowers can be eligible for an award when they voluntarily provide the SEC with "original, timely, and credible information that leads to a successful enforcement action."

Awards can range from 10 percent to 30 percent of the money collected when the recovery is more than $1 million. 

Monday's award was the second of 2017. On January 6, the SEC awarded more than $5.5 million to a whistleblower who helped stop an ongoing fraud. In that case, the SEC said it made an exception for the whistleblower who didn't provide the information "in writing," as required by SEC rules.

The SEC received about 4,000 tips in the latest reporting year and more than 14,000 since the award program started. Tips have come from individuals in all 50 states and the District of Columbia and 95 foreign countries.


Richard L. Cassin is the publisher and editor of the FCPA Blog.