The Securities and Exchange Commission (SEC) recently announced that it had awarded $22 million to two whistleblowers, with one of those individuals receiving an $18 million award. The two individuals provided the SEC with information concerning the same investigation; however, the individual receiving the larger award provided the information that led the SEC to initiate the investigation in the first place. The press release does not disclose the investigation that led to the award, but given the size of the award, the SEC likely obtained over $100 million from the entity that was the target of the investigation. Similarly, the SEC’s order does not disclose the identities of the two individual whistleblowers, shielding them from retaliation and public scrutiny.
This demonstrates the SEC’s commitment to protecting whistleblowers, and the mechanisms by which it does so. The SEC relies heavily on whistleblowers to reveal potential fraud to the SEC. Fraud, by its nature, is concealed from the prying eyes of curious investors and the SEC. According to government agencies like the SEC, whistleblowers are crucial in pealing back the shades and revealing fraud. As both an incentive and a reward, the SEC provides whistleblowers with a portion of any recovery against individuals and entities that the whistleblower has reported on. Since its inception in 2012, the SEC’s whistleblower program has awarded whistleblowers nearly $1 billion. Awards can range from 10 to 30 percent of the money collected when the SEC’s recovery exceeds $1 million. Further, there are protections in place to prevent retaliation and ensure that previous employees are not hampered in bringing fraud to the attention of the government.
The attorneys at Chilivis Grubman represent clients of all types and sizes in connection with SEC investigations and related securities litigation. If you need assistance with such a matter, please contact us today.
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