On January 23rd, the SEC Office of the Whistleblower announced an award in excess of $7 million to be split between three whistleblowers. The whistleblowers provided information to the SEC that allowed it to conclude an enforcement action related to an investment scheme. The involvement of the three whistleblowers was split. The first whistleblower provided information that initiated the SEC’s enforcement action and the other two whistleblowers provided critical information for the investigation as it was ongoing. The first whistleblower was awarded more than $4 million and the other two whistleblowers will split more than $3 million.
This award brings the total amount of awards from the inception of the SEC whistleblower program to $149 million from information provided by forty-one whistleblowers. SEC enforcement actions either initiated or supported by whistleblowers have yielded $935 million in financial remedies. The SEC announcement did not disclose any information regarding the whistleblowers’ identities as required by law.
The strong success of the SEC whistleblower program in a relatively short existence still faces potential challenge from the Trump administration depending on the direction the administration chooses to take regarding the Dodd-Frank Wall Street Reform and Consumer Protection Act. During the 2016 presidential campaign, President Trump sought to undo many facets of the Dodd-Frank Act. In his confirmation hearing Attorney General nominee Senator Jeff Sessions did mention a desire to continue to root out fraud through the False Claims Act. However, it remains to be seen whether this commitment will extend to other whistleblower programs including the SEC and IRS whistleblower programs.
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