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SEC Whistleblower Program Summer Roundup - Nearing the Billion Dollar Mark

Posted  September 9, 2021

For the SEC Whistleblower Program, it was business as usual this summer.  With total awards of more than $50 million to 25 whistleblowers, the agency moved ever closer to the billion dollar mark.  Here is how it played out for the SEC program over the not so lazy days of summer:

  • June 2 – $23 million (2 whistleblowers)
  • June 14 – $3 million (2 whistleblowers)
  • June 21 – $5.3 million (4 whistleblowers)
  • June 24 – $1 million
  • July 15 – $1 million
  • July 21 – $3 million
  • August 2 – $4 million (4 whistleblowers)
  • August 6 – $3.5 million (3 whistleblowers)
  • August 10 – $6 million (2 whistleblowers)
  • August 27 – $2.6 million (5 whistleblowers)

This all brings the total SEC whistleblower awards tally to $959 million to 203 whistleblowers since the program issued its first award in 2012.

While the bulk of the summer awards were relatively modest, in true SEC fashion the enthusiasm with which the agency doled them out was not.  Accompanying the announcement of each award was a statement by Acting SEC Whistleblower Chief Emily Pasquinelli trumpeting the critical role the whistleblowers played and the SEC’s commitment to continue rewarding whistleblowers who lend a helping hand.

The most recent set of awards were notable for two additional reasons.  First, one of them was made to a company outsider “who provided valuable independent analysis based upon a complex algorithm the whistleblower developed and applied to publicly available data.”  As Acting Chief Pasquinelli highlighted, the award shows the agency’s “commitment to reward whistleblowers who provide valuable information, developed either from a whistleblower’s independent knowledge or the whistleblower’s independent analysis . . . .”

Second, another of the awards was made to insiders working within the company’s compliance department.  The SEC generally will not credit whistleblowers who provide information based on their work within a company’s compliance or internal audit groups.  However, this rule does not apply if more than 120 days have passed since the alleged misconduct was first reported internally.  That was the case here as the SEC made clear in its press release announcing the award.

What all this means is the SEC remains steadfast in its continuing efforts to encourage and reward whistleblowers who come forward with valuable information.  It is less about how you derived the information and more about how helpful it is in identifying potential violations.  This summer’s parade of awards was no exception to this highly promoted enforcement approach.

So if you think you might have information relating to a potential securities law violation and would like to speak to a member of our whistleblower lawyer team, please do not hesitate to contact us.  And stay tuned.  The whistleblower award that brings us over the billion dollar line is no doubt just around the corner.

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Tagged in: Financial and Investment Fraud, Importance of Whistleblowers, SEC Whistleblower Reward Program, Securities Fraud, Whistleblower Rewards,