The SEC has announced awards totaling more than $1.1 million to five whistleblowers who provided high-quality information that led to successful enforcement actions.
In the first order, the SEC awarded three whistleblowers almost $500,000 in connection with two related enforcement actions. The first whistleblower provided information that prompted the opening of an investigation. The second and third whistleblowers provided information that significantly contributed to the success of the actions, and contributed additional, helpful assistance to the investigative staff.
In the second order, the SEC awarded nearly $600,000 to a whistleblower whose information caused the opening of an investigation. The whistleblower continued to provide helpful assistance by meeting with investigative staff in-person, providing documents, and identifying witnesses. The whistleblower also repeatedly reported the concerns internally in an effort to remedy the violations.
In the third order, the SEC awarded more than $100,000 to a whistleblower whose independent analysis led to a successful enforcement action. Among other things, the whistleblower conducted an analysis using information from publicly available documents to calculate an estimate of an important metric for a company, and then showed that the company’s disclosures regarding that metric were implausible. This is the fifth individual in FY21 who received an award based on independent analysis.
“These awards underscore the breadth of ways that company insiders, as well as whistleblowers not affiliated with a company, can positively impact SEC investigations,” said Jane Norberg, Chief of the SEC’s Office of the Whistleblower. “Whistleblowers who provide high-quality information or analysis may be eligible for an award where their information causes staff to open an investigation or meaningfully advances an existing investigation.”
Mark Astarita is a nationally recognized securities attorney, who represents investors, financial professionals and firms in securities litigation, arbitration and regulatory matters, including SEC and FINRA investigations and enforcement proceedings.
He is a partner in the national securities law firm Sallah Astarita & Cox, LLC, and the founder of The Securities Law Home Page - SECLaw.com, which was one of the first legal topic sites on the Internet. It went online in 1995 and is updated daily with news, commentary and securities law related links.