Yesterday (July 17), the Securities and Exchange Commission (SEC) announced an award of roughly $37 million “to a whistleblower who provided information not previously known to the SEC and which significantly contributed to a successful enforcement action.” Given the strict confidentiality the SEC maintains with its whistleblowers, the agency neither identified the whistleblower nor the enforcement action to which the whistleblower significantly contributed.  

All we know from the associated SEC Order is that the SEC met with the whistleblower only one time and in that meeting the whistleblower “provided important new information” and “helped focus [the SEC’s] attention on relevant witnesses, and influenced their decisions as to what documents to request and from which witnesses to take testimony.” We also know the whistleblower believed they were entitled to a higher award but the SEC disagreed, largely because the SEC had already opened the investigation before hearing from the whistleblower. 

In announcing the award, SEC Whistleblower Chief Creola Kelly stressed the award “illustrates the importance of the SEC’s whistleblower program, as the whistleblower’s information helped the agency return millions of dollars to harmed investors.” Under the SEC Whistleblower Program, whistleblowers who provide information that leads to a successful SEC enforcement action may be entitled to up to 30% of the government’s recovery. 

The program has been quite successful since it was enacted roughly a decade ago with an ever-increasing number of whistleblower tips flooding into the agency every year and with the SEC doling out more than a billion dollars in awards. Over the past year, however, the flow of awards has slowed, with this award being the first in months.   

It is not clear why the program has been less prolific of late.  But what is clear is that the SEC remains committed to whistleblowers and continues to recognize the critical role they play in SEC enforcement. So if you have information relating to potential securities fraud, there is no question the SEC wants to hear from you. 

And so do we. So if you think you might want to be an SEC whistleblower, or want to learn more about what it takes to be a successful whistleblower, please do not hesitate to contact us and we will connect you with an experienced member of our whistleblower team.  

Read SEC Makes $37 Million Whistleblower Award at constantinecannon.com