The SEC whistleblower program seems to be hitting its stride recently, with five whistleblowers awarded more than $26 million over the past month. The latest reward was $17 million, the second largest to date, for a detailed tip by a former company employee that substantially advanced a government investigation.
The recipient was one of five claimants to make an application for an award in the case. The SEC panel preliminarily rejected four claims and two individuals contested those decisions. In the end, the outcome was the same – only one whistleblower was awarded money.
In the press release, the SEC reiterated that funds to whistleblowers are paid out of a separate fund established by Congress and they do not reduce the money that would otherwise be returned to harmed investors from a government recovery.
The SEC Whistleblower program started six years ago when Congress passed the Dodd-Frank Act. Among its reforms, Congress authorized the SEC and CFTC to pay rewards to individuals that provide information about potential securities law violations which result in .
The largest award to date was for $30 million to an international tipster in September 2014. The third largest award was $14 million from October 2013 to an investor who reported a company swindling international real estate investors. For additional information about past awards, visit our up to date list.
The agency had been criticized by an article in the Wall Street Journals at the end of last year for delays in the announcement of rewards, with some individuals waiting up to three years for a determination. The SEC at the time replied that it was facing many unique questions of first impression which needed to be determined and were slowing the process. Although there is probably still a backlog, the number of positive decisions recently should give individuals waiting for determinations hope that the Securities & Exchange Commission is working on it.
To speak to our SEC whistleblower lawyers about this information or for an evaluation of a potential submission to the SEC, please call 1-800-590-4116.