SEC Announces New Whistleblower Award

The SEC announced yesterday that it will pay two whistleblowers an award of $875,000 for their reporting of original information that led to a successful SEC enforcement action. The total award, which will be split equally between the two whistleblowers, represents 30% of the sanctions collected by the SEC in the case – the maximum percentage award allowed under the SEC Whistleblower Program. In keeping with the program’s emphasis on protecting the anonymity and confidentiality of whistleblowers, the SEC did not disclose the names of the whistleblowers or provide identifying information about the underlying enforcement action.

This latest award suggests the SEC is beginning to complete investigations sparked or aided by the first wave of whistleblower tips received after the implementation of the SEC Whistleblower Program rules in August 2011. Given that SEC investigations typically take two to four years to complete – with larger and more complex cases often falling on the far end of that range – we expect to see an increasing number of significant awards in the coming months, as more cases work their way through the investigative pipeline. We applaud the whistleblowers in this case for coming forward and making a difference, and look forward to hearing more positive news from the SEC.

By Jordan Thomas and Vanessa De Simone