Top Ten SEC and CFTC Whistleblower Awards for 2023

It was a relatively quiet year for the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) in their payout of whistleblower awards under their respective whistleblower programs.  Under the SEC Program and CFTC Program — both enacted under the Dodd-Frank Wall Street Reform and Consumer Protection Act — whistleblowers who provide information that leads to a successful government enforcement action can recover up to 30% of the government’s recovery.  The programs have spawned an avalanche of whistleblower tips, leading to billions of dollars of government recoveries and close to $2 billion in whistleblower rewards.

But this past year, there was a bit of a drop off in the number of whistleblower awards the agencies doled out.  The CFTC was especially stingy this year with only three awards, the largest one being $18 million, far lower than the record award of roughly $200 million the agency made about two years ago.

The SEC was a bit more generous last year with nine awards, but still far fewer than in years past.  However, among those nine were two of the agencies largest whistleblower awards to date, one of $279 million and another of $104 million.  The $279 million blockbuster award is the highest whistleblower award ever under any of the government’s ever-expanding list of whistleblower rewards programs.

So despite the dip in the number of awards, there is no question — at least for the SEC — that the whistleblower program is alive and well and still a critical part of government fraud enforcement.

Here is our listing of the Top-10 awards this past year.  Because of the agencies’ strict commitment to maintaining the confidentiality of its whistleblowers, we do not know the identity of any of these individuals, and in most cases, do not even know the enforcement action with which the award is associated.

1 — $279M (SEC).  On May 5, the SEC made a $279 million award to a single whistleblower, the highest award ever under the SEC Whistleblower Program and the largest under any whistleblower rewards program.  In hyping the award, SEC Director of Enforcement Gurbir Grewal said “the size of today’s award . . . not only incentivizes whistleblowers to come forward with accurate information about potential securities law violations, but also reflects the tremendous success of our whistleblower program.”  While the SEC did not disclose the identity of the whistleblower, thanks to some special sleuthing by the Wall Street Journal, the blockbuster award apparently stems from the more than $1 billion Swedish telecom giant Ericsson paid in December 2019 to settle SEC and Department of Justice (DOJ) charges of foreign bribery.

2 — $104M (SEC).  On August 4, the SEC made a $104 million award to seven whistleblowers.  At the time, it was the fourth largest in the SEC program’s history (now the fifth largest).  The seven whistleblowers were composed of two sets of joint claimants and three single claimants, and each provided information that either prompted the opening of or significantly contributed to an SEC investigation.  In announcing the award, SEC Whistleblower Chief Creola Kelly said “[t]oday’s awards show that specific and credible [whistleblower] information plays an integral part in the SEC’s enforcement efforts.”

3 — $28M (SEC).  On December 22, the SEC made a $28 million award to seven whistleblowers comprised of a single claimant and two sets of joint claimants.  According to the SEC, the single claimant and first set of joint claimants provided significant and detailed information early in the investigation that saved the SEC considerable time and resources.  The second set of joint claimants provided new, but more limited, information later in the investigation.

4 — $28M (SEC).  On January 24, the SEC made a $28 million award to two whistleblowers whose information prompted the SEC to open the investigation that led to the agency’s successful settlement, which resulted in the return of millions of dollars to harmed investors.  Whistleblower Chief Kelly used the settlement to highlight the critical role of whistleblowers to the agency’s enforcement efforts: “Whistleblowers play an instrumental role in helping the SEC detect and prosecute wrongdoing and in protecting investors and the capital markets.  Whistleblowers perform an incredible public service, as reflected by today’s award.”

5 — $18M (CFTC).  On October 12, the CFTC made an $18 million whistleblower award to a single whistleblower who provided detailed information and assistance in a CFTC enforcement action and in a related action by another agency.  Director of CFTC Enforcement Ian McGinley applauded the whistleblower for providing “valuable information during multiple contacts” and highlighted how “the CFTC’s enforcement efforts benefit greatly from whistleblowers like this one, who provide and interpret key evidence and thereby conserve CFTC resources.”

6 — $18M (SEC).  On August 25, the SEC made an $18 million whistleblower award to a single whistleblower.  The SEC noted that after initially reporting the misconduct internally to the company, the whistleblower then went to the agency, which prompted it to open an investigation.  Whistleblower Chief Kelly trumpeted that “whistleblowers continue to play an essential role in assisting the agency in detecting misconduct and bringing securities law violators to justice.”  She added that this particular whistleblower “refused to turn a blind eye to the wrongdoing, reporting misconduct internally and then to the Commission.”

7 — $18M (SEC).  On January 19, the SEC made an $18 million whistleblower award to three whistleblowers.  According to the SEC, the first whistleblower provided the SEC with detailed and significant information that led to the opening of the investigation, while the latter two whistleblowers provided information later in the investigation, which significantly contributed to the success of the enforcement action.

8 — $15M (CFTC).  On September 19, the CFTC made whistleblower awards totaling $15 million to two whistleblowers.  According to the CFTC, one of the whistleblowers interpreted key evidence and helped the agency identify new lines of inquiry.  The other one provided information that led the agency to open the investigation along with significant additional support.  In announcing the awards, acting CFTC Whistleblower Chief Christina McGlosson stated the awards “show how whistleblowers can act as force multipliers for the CFTC’s enforcement efforts.”

9 — $12M (SEC).  On March 31, the SEC made a whistleblower award of $12 million to two whistleblowers.  According to the SEC, the first whistleblower prompted the opening of the investigation and provided information on violations that would otherwise have been difficult to detect.  The second whistleblower submitted important new information during the course of the investigation.  In announcing the award, SEC Whistleblower Chief Kelly stressed how “whistleblowers play a critical role in helping the SEC detect and prosecute wrongdoing and in protecting investors and the capital markets.”

10 — $9M (SEC).  On July 12, the SEC made a whistleblower award of $9 million to a single whistleblower.  The SEC noted the whistleblower reported to the SEC only after repeatedly reporting its concerns to the company.

If you think you might have information on potential securities fraud or commodities fraud, please don’t hesitate to contact us so we can connect you with an experienced member of our whistleblower lawyer team for a free and confidential consult.  Who knows, maybe you’ll make the Top-10 list one day, or at least put a stop to fraud and misconduct that might otherwise go undetected.

Read More

• SEC Enforcement Actions
• CFTC Enforcement Actions
• Fraud Regulated by the CFTC
• The SEC Whistleblower Program
• The CFTC Whistleblower Program

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