In the first half of 2024, the SEC Whistleblower Program awarded over $18 million to whistleblowers who aided in the agency’s enforcement efforts. Below are the top five awards from the first half of 2024.
Since its inception in 2010, the Securities and Exchange Commission (SEC) Whistleblower Program has made significant strides, granting over $1.9 billion in whistleblower awards. In the first half of 2024, over $18 million was awarded to individuals who voluntarily provided original information that led to a successful enforcement action, a testament to the program’s effectiveness.
Under the SEC Whistleblower Program, qualified whistleblowers can receive 10-30% of the funds collected from a successful enforcement action based on their tip. The SEC does not disclose identifying information about award recipients, ensuring their protection and the program’s integrity.
Following are the top five whistleblower awards of the first half 2024:
1. $3.6 Million
On June 17, the SEC granted two claimants a total of $3.6 million, with the first receiving $2,400,000 and the second receiving $1,200,000.
The SEC acknowledged the significant contribution of the first Claimant whose disclosure “caused the staff to open the investigation” and “provided ongoing assistance by participating in interviews and providing documents, which saved Commission resources by helping the staff obtain information in an efficient manner.”
Claimant Two “provided information that caused the staff to inquire concerning different conduct as part of a current investigation” and “provided ongoing assistance by participating in interviews and providing documents, which helped to expedite the staff’s investigation,” according to the award order.
The award document noted that Claimant Two received a reduced reward for reporting information to the commission months after the staff had opened its investigation. Furthermore, it was noted that Claimant One provided a higher level of assistance than Claimant Two and that Claimant One’s information ultimately formed the basis of more charges in the Covered Action.
2. $3.4 Million.
On May 31, the SEC granted a payment of $3.4 million to a single Claimant. Five others filed for an award for the Covered Action but were denied.
According to the SEC, “Claimant voluntarily provided original information that significantly contributed to the success of the Covered Action,” underscoring whistleblowers’ crucial role in enforcing securities regulations.
“Enforcement staff opened the Covered Action investigation based on a referral from staff in the Division of Examinations, and not because of information submitted by any of the claimants.” the agency states.
However, it notes that the whistleblower “met with Enforcement staff” and “provided new, helpful information that substantially advanced the investigation.
The SEC further explains that the awarded whistleblower suffered hardship as a result of blowing the whistle and that there were “high law enforcement interests in this matter.”
Two of the Claimants were denied because they did not have personal knowledge of the investigation’s opening. One Claimant was denied because their tip was primarily publicly available information, and another was denied because their information did not lead to the success of the Covered Action.
3. $2.5 MILLION
On June 20, the SEC awarded $2.5 million to Joint Claimants.
According to the SEC, “the record demonstrates that Joint Claimants voluntarily provided original information to the Commission that led to the successful enforcement of the Covered Action.”
The Joint Claimants “alerted Commission staff to the conduct, prompting an examination to be commenced that resulted in a referral to staff in the Division of Enforcement and the opening of an investigation,” the SEC explains in the award order.
They also “provided significant additional information and assistance during the course of the examination and investigation, including communicating with Commission staff multiple times, which helped to save staff time and resources.”
4. $2.4 Million
On April 3, the SEC granted two claimants a combined award of $2,400,000. The first Claimant received $2 million, and the second received $400,000.
According to the SEC, “Claimant 1 qualifies as a whistleblower and Claimant 1 voluntarily provided original information to the Commission that caused Enforcement staff to open an investigation that led to the successful enforcement of the Covered Action.”
However, in 2022, Claimant 2 was originally denied as the SEC claimed that their disclosure was made by a general counsel on behalf of an entity owned by Claimant 2 and not on behalf of Claimant 2 as an individual.
Following the SEC’s 2022 denial, the Claimant filed a petition for review of their denial in the Court of Appeals for the Fifth Circuit. The SEC then sought a remand in the case and requested further information from the Claimant.
The Claimant provided “a new declaration from the entity’s general counsel that expressly states that the general counsel represented Claimant 2 in Claimant 2’s personal capacity throughout the process of providing information regarding the Company to the SEC.”
The SEC thus determined that Claimant 2 did qualify as a whistleblower and had “voluntarily provided original information to the Commission that significantly contributed to the success of the Covered Action.”
This marked the first time the SEC awarded a whistleblower who appealed an award denial before a federal appeals court.
5. $2.4 Million
On April 25, an individual Claimant was awarded $2.4 million after voluntarily providing original information to the Commission.
According to the SEC, “after internally reporting concerns, Claimant submitted a tip to the Commission that prompted the opening of the investigation and thereafter provided continuing assistance to the staff.”
Brooke Burkhart and Avery Hudson also contributed to this article.
