The Securities and Exchange Commission today announced awards totaling more than $1.7 million to two whistleblowers in separate proceedings. Both whistleblowers provided Forms TCR to the Commission within 30 days of their first learning of the Form TCR filing requirement as set forth in new Securities and Exchange Act Rule 21F-9(e).
In the first order, the SEC awarded a whistleblower over $900,000 in connection with an enforcement action and a related action. The whistleblower provided significant evidence, including a critical declaration, that helped expedite an ongoing investigation and enabled the SEC to shut down an ongoing fraudulent scheme preying on retail investors.
In the second order, the SEC awarded a whistleblower over $800,000 for providing important evidence of false and misleading statements made to investors, resulting in the return of millions to harmed investors. The whistleblower provided assistance to the staff by participating in an interview and producing documents.
“As these awards show, deserving whistleblowers may receive an award if they comply with the Form TCR filing requirements within 30 days of first obtaining actual or constructive notice of the filing requirement or 30 days from the date the whistleblower hires a lawyer to represent them in connection with the whistleblower’s previous submission of information to the Commission, whichever occurs first, and they otherwise meet the eligibility requirements,” said Jane Norberg, Chief of the SEC’s Office of the Whistleblower. “These whistleblowers earned their awards by providing high quality information that supported a pair of successful Commission enforcement actions.”
The SEC has awarded approximately $752 million to 138 individuals since issuing its first award in 2012. All payments are made out of an investor protection fund established by Congress that is financed entirely through monetary sanctions paid to the SEC by securities law violators. No money has been taken or withheld from harmed investors to pay whistleblower awards. Whistleblowers may be eligible for an award when they voluntarily provide the SEC with original, timely, and credible information that leads to a successful enforcement action. Whistleblower awards can range from 10-30% of the money collected when the monetary sanctions exceed $1 million.
As set forth in the Dodd-Frank Act, the SEC protects the confidentiality of whistleblowers and does not disclose information that could reveal a whistleblower’s identity.