SEC Awards 28M dollar to Seven Whistleblowers in Investor Recovery
On December 22, the U.S. SEC Awards $28M in whistleblower awards distributed among seven whistleblowers. These individuals voluntarily supplied original information crucial to the success of a specific enforcement action.
The SEC Awards $13 million to a sole whistleblower, $13 million divided among four joint whistleblowers, and $2 million shared between two other joint whistleblowers.
The exchange Commission Whistleblowers Program recognizes qualified individuals who willingly provide original information leading to successful enforcement actions. Such whistleblowers are entitled to monetary awards ranging from 10% to 30% of the funds collected in connection with the enforcement action triggered by their disclosure.
SEC Awards $28M
“The Securities exchange Commission’s Whistleblower Office Chief, Creola Kelly, commended the invaluable contributions of these whistleblowers, emphasizing their pivotal role in the SEC’s recovery of millions for affected investors.
As outlined in the Securities exchange Commission’s award order, recipients of the $13 million awards provided detailed and crucial information early in the investigation. Their insights significantly propelled the staff’s efforts, saving time and resources, closely aligning with the charges in the Covered Action, and leading to substantial returns for affected investors.
Continuing their support, these whistleblowers actively participated in voluntary interviews, supplied vital documents, and identified key witnesses critical to the investigation.
The Securities exchange Commission acknowledges the challenges faced by these five whistleblowers, who not only reported internally but also endured hardships. Meanwhile, the $2 million award recipients, though contributing valuable information, did so later in the investigation, with much of their input already known to the staff.
Maintaining confidentiality, the Securities exchange Commission shields whistleblowers’ identities under its anti-retaliation measures.
Since its inception in 2010, the Securities exchange Commission Whistleblowers Program has granted over $1.9 billion to informants. The 2023 Fiscal Year marked a historic high, with record-breaking whistleblower awards, the largest single-year total, and a surge in tips.
Kohn, Kohn & Colapinto introduced an index tracking all Securities exchange Commission award orders. Stephen M. Kohn, founding partner, believes the index is a vital resource for whistleblower attorneys, self-represented whistleblowers, and potential informants worldwide, offering insights into securities and commodities violations.“
Background
The CRS determined that Claimants 6 and 7 jointly qualify as whistleblowers. As per Exchange Act Section 21F(a)(6), they share a tip. Their joint status doesn’t impact the net award percentage. Unless they request otherwise within ten (10) days, each will receive 50% of their joint award.
The CRS also recommended denying awards for three claimants who didn’t contest Preliminary Determinations. Thus, these determinations became the Final Order through Exchange Act Rule 21F-10(f).
Claimant 10, identified as such in Preliminary Determinations, refers to themselves as Claimant 9 in their response.
The CRS found that the Other Agency action doesn’t qualify as a related action under Commission whistleblower rules. Claimants 1, 2, 3, 4, 5, 6, and 7, not contesting this, had their related action award claims finalized by operation of law.
What is the whistleblower program
The Securities exchange Commission Whistleblower Program, established by Congress, encourages individuals to report potential violations of federal securities laws to the Securities exchange Commissionby offering financial incentives. Eligible whistleblowers can receive awards ranging from 10% to 30% of the funds collected based on their provided information.
The Office of the Whistleblower administers the Securities exchange Commission’s program, offering support and information to whistleblowers aware of potential securities law violations. Since 2012, the Securities exchange Commissionhas granted around $812 million to 151 individuals. These payments are sourced from an investor protection fund.
Conclusion
In line with this, the following orders are issued: Claimant 1 shall receive an award equal to ***% of the monetary sanctions collected in the Covered Action. Additionally, Claimants 2, 3, 4, and 5 are entitled to a ***% joint award of the monetary sanctions from the same action. Furthermore, a joint award equal to % of the monetary sanctions collected in the Covered Action is granted to Claimants 6 and 7.
In a separate ruling, it is ordered that Claimant 10’s whistleblower award application in the Covered Action is denied.
These decisions are hereby made by the Commission.
