The SEC announced an award of over $7 million split among three (3) whistleblower who helped the SEC litigate an investment scheme.
The SEC began their investigation when one of the whistleblowers provided a tip to the SEC. The initial whistleblower will receive more than $4 million for his initial information, per the SEC. During the SEC’s investigation, the two other whistleblowers together provided new information that significantly contributed to the SEC’s successful enforcement action. The two other whistleblowers will split more than $3 million for the information they provided to the SEC.
According to the SEC, the tips provided by various whistleblowers have resulted in almost $1 billion in financial remedies, a great amount given that the program was established less than five years ago.
In the aggregate, the whistleblower program has awarded approximately $149 million to 41 whistleblowers who voluntarily provided the SEC with original and useful information that led to a successful enforcement action.
The Dodd-Frank Act established the whistleblower program in 2012, and it entices “whistleblowers” to come forth and help the SEC identify possible fraud and other violations much earlier than might have been possible, consequently reducing harm to investors, preserving the integrity of U.S. capital markets, and swiftly holding perpetrators of unlawful conduct accountable, according to the SEC Office of the Whistleblower website.
Additionally, the Act offers confidentiality, protection from retaliation, and rewards fraud tipsters for reporting wrongdoing that leads to an SEC enforcement action in which over $1 million in sanctions is ordered. The award can range anywhere from 10 to 30 percent of the sanctions, according to the website.
Confidentiality is an important aspect of the whistleblower process. Without it, some whistleblower might be black-balled by the industry. Even the SEC order, publicly available, redacts and eliminates all references to the whistleblowers and any facts that might indicate their identity.
Scott L. Silver, managing partner of the Silver Law Group, was an early proponent of the legislation and authored a primer on the SEC Whistleblower Program. Our legal team includes former defense attorneys and government prosecutors now working to protect whistleblowers.
Silver Law Group is committed to the protection of whistleblowers through the whistleblower claim process and can prosecute your whistleblower claims. If you have questions about your legal rights as a whistleblower, please contact Scott Silver of the Silver Law Group for a free consultation at ssilver@silverlaw.com or toll free at (800) 975-4345.