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SEC Whistleblower Lawyer Blog

Articles Posted in SEC Whistleblower

On April 9, 2021, The SEC announced the award of $2.5 million to a whistleblower for information and assistance that led to a successful enforcement action.  This case involved a breach of fiduciary duty that was owed to investors. The SEC determined that the individual voluntarily provided “significant ongoing assistance” which included information and meeting with staff. This whistleblower provided key information that helped the SEC bring their enforcement action.  The company was engaged in ongoing violations of the federal securities laws, which led to law enforcement interest. Additionally, the whistleblower also reported  concerns internally to the company prior to notifying the SEC.  A second claimant was involved in this case, but the SEC’s Claims Review Staff (CRS) determined it ineligible. The claimant decided not to request a review of this preliminary determination.   The SEC decides on an award by treating both the administrative and judicial facts as a single “covered action,” since the case arose from the same information. An SEC bounty can be anywhere from 10% to 30% of recovered funds that total over $1 million from civil monetary penalties and disgorgement. These bounties are never taken from defrauded investor funds.On April 9, 2021, The SEC announced the award of $2.5 million to a whistleblower for information and assistance that led to a successful enforcement action.

This case involved a breach of fiduciary duty that was owed to investors. The SEC determined that the individual voluntarily provided “significant ongoing assistance” which included information and meeting with staff. This whistleblower provided key information that helped the SEC bring their enforcement action. Continue reading

Today, The Securities and Exchange Commission (SEC) announced the awarding of two separate bounties to two whistleblowers, $13 million and $10 million, respectively. Both individuals provided significant assistance and information that led to several successful enforcement actions for the SEC as well as related actions for another federal agency.  This means that the information provided benefitted both the SEC and the other agency, resulting in an SEC bounty for both. The SEC order stated that both whistleblowers submitted information that led to the discovery of a “complex and fraudulent scheme involving multiple individuals and tens of millions of dollars in ill-gotten gains.”  The SEC has a strict 90-day guideline for submissions. In this case, the second whistleblower was 18 days late, which would normally disqualify one for an SEC award. Under the circumstances, timely reporting would have resulted in a significant hardship to that individual. Due to the “significant” contributions to the investigation, the SEC exercised their discretionary authority to suspend the 90-day deadline and award the individual an SEC bounty for their assistance.The Securities and Exchange Commission (SEC) announced the awarding of two separate bounties to two whistleblowers, $13 million and $10 million, respectively. Both individuals provided significant assistance and information that led to several successful enforcement actions for the SEC as well as related actions for another federal agency. Continue reading

The Securities and Exchange Commission (SEC) announced that it awarded a whistleblower $4.2 million for critical and original information that led to a successful enforcement action. The individual tipped the SEC regarding specific possible violations of the federal securities laws that, in turn, caused an investigation to be opened.  Once the investigation was commenced, the SEC whistleblower provided material assistance to the SEC, including documentation, identifying “key players” in the fraudulent scheme and meeting with SEC staff.  This successful SEC enforcement action brings the number of whistleblowers who received bounties to 164 since the program’s inception. Thus far, the SEC has awarded a total of $905 million to those whistleblowers who provided the SEC with tips, documents and information. These SEC enforcement actions ultimately lead to the recovery of millions of dollars for defrauded investors, and further strengthened the SEC’s deterrent effect in the securities markets.  Financial Recovery  A whistleblower may receive an award (also known as a bounty) from the SEC ranging from 10% to 30% of the financial sanctions recovered from the wrongdoers assuming the total collected exceeds $1M. This translates into $100,000 to $300,000 for a $1M recovered by the SEC. Notably, the SEC bounties are not taken from the money recovered for investors. In addition, after the $1M threshold is reached, a whistleblower may also be entitled to a percentage of recovered amounts arising from related cases brought by other governmental agencies.The Securities and Exchange Commission (SEC) announced that it awarded a whistleblower $4.2 million for critical and original information that led to a successful enforcement action. The individual tipped the SEC regarding specific possible violations of the federal securities laws that, in turn, caused an investigation to be opened. Once the investigation was commenced, the SEC whistleblower provided material assistance to the SEC, including documentation, identifying “key players” in the fraudulent scheme and meeting with SEC staff. Continue reading

The Securities & Exchange Commission (SEC) announced its latest award of $9.2 million to a helpful whistleblower who offered assistance at their own expense.  This individual traveled to be personally interviewed by the US Department of Justice, and paid for their travel out-of-pocket. As a result, their information led to successful actions led to actions by the DOJ, including a non-prosecution agreement (NPA) or deferred prosecution agreement (DPA).  This whistleblower offered a significant amount of information related to a continuing fraud to the SEC. The information led to a substantial amount of money that could be returned to the defrauded investors. The SEC then provided the information to the DOJ for their investigation and actions.  Additionally, this same whistleblower received a previous award from the SEC resulting from the same information that led to a successful SEC action. The previous SEC award is a precursor to today’s related action whistleblower award. The Securities & Exchange Commission (SEC) announced its latest award of $9.2 million to a helpful whistleblower who offered assistance at their own expense.

This individual traveled to be personally interviewed by the US Department of Justice, and paid for their travel out-of-pocket. As a result, their information led to successful actions led to actions by the DOJ, including a non-prosecution agreement (NPA) or deferred prosecution agreement (DPA). Continue reading

A whistleblower who filed an internal report prior submitting a tip to the SEC has been awarded $500,000 by the agency. The information provided by the whistleblower gave the SEC and another agency what they needed to file actions quickly in order to stop a continuing fraudulent scheme.  The individual first submitted an internal report that led to an internal investigation. The company provided this information to an external agency, which notified the SEC.  Additionally, the individual contacted the SEC separately within 120 days of filing the internal report. The SEC’s “safe harbor” provision means that if the report is made within the 120-day timeframe, the agency treats it as if the report was made the same day.   Exchange Act Rule 21F-4(b)(7) provides in relevant part that:A whistleblower who filed an internal report prior submitting a tip to the SEC has been awarded $500,000 by the agency. The information provided by the whistleblower gave the SEC and another agency what they needed to file actions quickly in order to stop a continuing fraudulent scheme. Continue reading

The SEC has awarded two individuals more than $3M related to two agency separate enforcement actions.  In the first, the agency awarded $3.2M to one individual who alerted the SEC to certain violations. The individual also gave the SEC crucial subject matter expertise, which conserved agency resources, as well as which identifying important issues on which to focus.  The SEC awarded second individual $100,000 for “significant information and ongoing assistance” in the detection of an ongoing investor fraud, then put a stop to it.  A whistleblower is an individual that reports a person and/or organization engaged in illegal and illicit activity. It can be anyone working in an organization, or someone affiliated, such as a customer or vendor. Anyone with evidence of fraud or other wrongdoing can be a whistleblower. The SEC primarily handles cases related to securities and other financial fraud.  Since beginning its Whistleblower program in 2012, the SEC has awarded more than $816M to 153 individuals who have provided critical information to the agency. The awards are funded by the SEC’s investor protection fund created by Congress and funded by financial sanctions from those who violate SEC laws. None of the funds are from the investors themselves. The SEC has awarded two individuals more than $3M related to two agency separate enforcement actions.

In the first, the agency awarded $3.2M to one individual who alerted the SEC to certain violations. The individual also gave the SEC crucial subject matter expertise, which conserved agency resources, as well as which identifying important issues on which to focus. Continue reading

The SEC today awarded a whistleblower a sum of $28M after providing the SEC with information that led to a successful enforcement action and a second related action with another federal agency. The second agency was not identified. As a result of the informant’s information, both the SEC and the second federal agency made the decision to open and pursue individual investigations. Because of the second related action, the informant was also eligible for another award brought about from the initial SEC investigation and enforcement action. “The SEC has awarded more than $900 million over the life of the program, including almost $85 million to nine individuals in this month alone, which reflects the vitality and continued success of the SEC’s whistleblower program,” said Emily Pasquinelli, the current Acting Chief of the SEC’s Office of the Whistleblower.  The agency has awarded an astonishing $901 million to 163 individuals since the program began in 2012, with no signs of slowing down.The SEC today awarded a whistleblower a sum of $28M after providing the SEC with information that led to a successful enforcement action and a second related action with another federal agency. The second agency was not identified.

As a result of the informant’s information, both the SEC and the second federal agency made the decision to open and pursue individual investigations. Because of the second related action, the informant was also eligible for another award brought about from the initial SEC investigation and enforcement action. Continue reading

In two separate cases, the SEC has awarded four individuals sums that total over $31 million for critical information that led to successful enforcement actions. The first award of $27 million went to two individuals who not only provided the agency with vital information, they offered continual assistance and met in-person with agency staff on three different days. Their information and ongoing assistance for an existing investigation helped secure the specific allegations that led to charges against the company. A third individual involved with this case was denied any award because they provided no information to the agency during the course of the investigation. In the second case, the agency awarded $3.75 million to one tipster, and $750,000 to the second. Ironically, the individual who was awarded the larger amount had their original claim denied, but appealed the decision. That information they provided led to a claim against an individual, and ultimately an award, by proving that it was provided voluntarily and prior to the request. The agency later stated that the individual awarded the larger amount “provided information and assistance that was more important to the resolution of the overall case.”In two separate cases, the SEC has awarded four individuals sums that total over $31 million for critical information that led to successful enforcement actions.

The first award of $27 million went to two individuals who not only provided the agency with vital information, they offered continual assistance and met in-person with agency staff on three different days. Their information and ongoing assistance for an existing investigation helped secure the specific allegations that led to charges against the company. Continue reading

The Securities & Exchange Commission (SEC) announced today the award of $3.6 million to a whistleblower whose assistance helped the agency with another case.  The individual offered “valuable information” to the agency’s attention, leading to a new investigation of wrongdoing and violations of federal securities laws. The whistleblower’s sustained assistance to SEC staff allowed the agency to continue its investigation, leading to a successful enforcement action.  The identity of the whistleblower is confidential, as well as defining facts about the investigation and subsequent enforcement action. However, the SEC releases some information to let the public know about the battle against fraud and other investment-related crimes, as well as to encourage others to come forward if they witness wrongdoing.  The SEC has handed more than $800 million in awards to individuals who have submitted tips and other information that resulted in an enforcement action. Awards are based on the amount of financial sanctions (money) recovered from the companies engaged in wrongdoing. An award is usually made if there are more than $1M in fines and fees, and are from 10% to 30% of the sanctions. Investor funds are returned whenever possible, and are never part of these awards.The Securities & Exchange Commission (SEC) announced today the award of $3.6 million to a whistleblower whose assistance helped the agency with another case.

The individual offered “valuable information” to the agency’s attention, leading to a new investigation of wrongdoing and violations of federal securities laws. The whistleblower’s sustained assistance to SEC staff allowed the agency to continue its investigation, leading to a successful enforcement action. Continue reading

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