SEC Issues $2 Million Award to Three Whistleblowers
The U.S. Securities and Exchange Commission (SEC) announced on March 8, 2016, that it would pay almost $2 million to three whistleblowers for information they provided that led to a successful enforcement action. The awards were issued as part of the SEC Whistleblower Program, which has now paid more than $57 million to 26 whistleblowers since the program began in 2011.
According to the SEC, approximately $1.8 million will go to one whistleblower who voluntarily provided information that prompted the SEC to begin its investigation and continued to provide valuable information throughout the investigation. The SEC also awarded two additional whistleblowers approximately $65,000 each for information they provided during the investigation.
Because of the SEC’s commitment to protecting the anonymity of whistleblowers who choose not to disclose their identity, very little information about the company or the whistleblowers was revealed by the SEC. This is by design – even revealing the name of the company penalized could ultimately lead to revealing the identity of the whistleblowers, thereby potentially exposing them to retaliation. However, because we know that whistleblower awards range from 10 percent to 30 percent of the money collected by the SEC, the SEC must have recovered between approximately $6.4 million and $19.3 million as a result of the whistleblowers’ information.
Sean X. McKessy, Chief of the SEC’s Office of the Whistleblower, stated that the agency was “seeing a significant uptick in whistleblower tips over prior years.” Mr. McKessy attributed the uptick to “increased public awareness of our program and the tens of millions of dollars we’ve paid to whistleblowers for information that helped us bring successful enforcement actions.”