The Securities and Exchange Commission (SEC) announced an award of more than $50 million to a pair of joint whistleblowers, adding to the highest awards the agency has doled out since the program began in 2012.
The two awardees voluntarily provided original information to the SEC that led to the success of a settled administrative and cease-and-desist proceeding, according to an order determining their awards.
Not only did the recipients alert the agency to the potential violations—triggering an investigation—but they met with SEC staff on numerous occasions, provided voluminous detailed documents and provided ongoing assistance throughout the investigation, the agency said.
Their information was “critical” to the SEC’s ability to identify and investigate the unlawful securities violations and resulting action, according to the order, and because the unlawful conduct involved “highly complex transactions,” it would have been difficult to detect in the absence of their information.
The award was divided evenly between the two unnamed recipients, the SEC said.
“Today’s award is the second largest in the history of the program, reflecting the tremendous contribution of these joint whistleblowers to our ability to recover funds for harmed investors,” Jane Norberg, Chief of the SEC’s Office of the Whistleblower, said in a statement. “The SEC has now awarded over a quarter of a billion dollars to whistleblowers in the first seven months of this fiscal year alone, demonstrating the tremendous value of whistleblowers to our enforcement program.”
In less than a decade, the SEC has awarded approximately $838 million to 156 individuals. Last year, the agency set a new record with a $114 million award to a single whistleblower, which reflected a $52 million payout from the SEC and a roughly $62 million award based on “related actions” by another agency.
To read the SEC order, click here.
Why it matters: The SEC continues to set records with its whistleblower program, sending an important message about the value of employee information. Employers should remember that financial payouts of tens of millions of dollars provide a significant incentive to employees to share their knowledge with federal and state agencies.