On October 29, the U.S. Securities and Trade Fee (SEC) issued a whistleblower award for over $2 million to a person who offered the company with unique data. The whistleblower’s data was utilized in a profitable enforcement motion by the U.S. Division of Justice (DOJ).
Certified SEC whistleblowers are entitled to financial awards of 10-30% of the funds recovered by the SEC in actions related with their disclosure. Moreover, the SEC pays associated motion awards when a whistleblower’s data can be utilized in an enforcement motion by one other company.
In accordance to the SEC, the whistleblower on this case had beforehand obtained a whistleblower award for the SEC’s enforcement motion related to their disclosure. The whistleblower grew to become eligible for the associated motion award based mostly on a 2020 SEC rule amendment clarifying the associated motion provisions of the Dodd-Frank Act.
“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,” mentioned Emily Pasquinelli, Performing Chief of the SEC’s Workplace 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.”
In accordance to the award order, the whistleblower “provided information that prompted the opening of the DOJ and SEC investigations” and “provided extensive, ongoing assistance in the investigations.”
The 2020 SEC whistleblower rule amendments went into impact on December 7, 2020. On February 23, 2021 the SEC issued its first associated motion award for a non-prosecution settlement or deferred prosecution settlement by the DOJ. In that case, the SEC awarded more than $9.2 million to a whistleblower.
Since issuing its first award in 2012, the SEC has awarded roughly $1.1 billion to 224 people.
Geoff Schweller additionally contributed to this text.