SEC Whistleblower Program: $17 Million To Our Anonymous Client

The Securities and Exchange Commission (SEC) awarded more than $17 million to a whistleblower represented by Whistleblower Law Collaborative’s Suzanne Durrell and Bob Thomas.  The whistleblower client submitted a tip under the SEC Whistleblower Program.  The tip and subsequent information and assistance led to monetary sanctions in an SEC enforcement action and a related action. The SEC awarded our client 30% of the monetary sanctions collected, the highest percentage award allowed under the SEC Whistleblower Program.

[This] award underscores the SEC’s commitment to rewarding meritorious whistleblowers who provide valuable information and exemplary cooperation that advance the agency’s enforcement efforts,

–Creola Kelly, Chief of the SEC’s Office of the Whistleblower in announcing the award.

Attorneys Bob Thomas and Suzanne Durrell emphasized: “We and our client are very gratified that the SEC recognized and rewarded the extraordinary contributions of our client. We applaud the SEC for its impressive skill and dedication in prosecuting this matter, and for its highly successful track record in working with whistleblowers and their attorneys.”

How the SEC Whistleblower Award Program Works

The SEC program operates somewhat differently than the False Claims Act and other qui tam statutes.  SEC provides a very helpful graphic on the process:SEC Whistleblower Award Program

In general, a whistleblower files a “Tip, Complaint, or Referral” form (TCR) with the SEC office of the whistleblower.  The SEC then investigates and at its choice may pursue claims based on the tip.  SEC periodically posts “notices of covered action.” These notices detail any results potentially subject to whistleblower rewards.  Then, whistleblowers must file to claim their share of the recovery.  Notably, the program does not give the whistleblower the right to pursue their own claims if the SEC does not. 

How the SEC determined the maximum award was appropriate

The SEC may award between 10-30% of the monetary recoveries to an eligible whistleblower.  It uses several factors in deciding how much to award. Here, the SEC noted that the highest possible award was appropriate because:

  • the whistleblower “provided SEC Enforcement staff with detailed information and documents early in the investigation.”
  • the whistleblower “offered ongoing assistance by, among other things, speaking with the Enforcement staff on several occasions.”
  • “the resulting charges [brought by the government] were based on conduct that was the subject of [the whistleblower’s] information and assistance.”
  • the whistleblower’s information was “significant.”
  • the misconduct was of “high law enforcement interest.”

The Success of the SEC Whistleblower Program

The SEC Whistleblower Program has been very successful.  Since the program began, enforcement matters brought using information from meritorious whistleblowers have resulted in orders for nearly $5 billion in total monetary sanctions. This money is returned to the Investor Protection Fund for the benefit of taxpayers, defrauded investors, and others harmed by marketplace misconduct.

Since 2012, the SEC has awarded approximately $1.3 billion to over 275 individual whistleblowers. Importantly, the SEC provides all awards from the Investor Protection Fund. As a result, no money is taken or withheld from harmed investors to pay whistleblower awards.

Whistleblowers may be eligible for an award when they voluntarily provide the SEC with original, timely, and credible information that leads to a successful enforcement action. Whistleblower awards can range from 10 percent to 30 percent of the money collected when the monetary sanctions exceed $1 million.

Further, as in this matter, the SEC protects the confidentiality of whistleblowers and does not disclose any information that could reveal a whistleblower’s identity.

We Help SEC Whistleblowers File Successful Claims

The Whistleblower Law Collaborative has secured awards for clients in several SEC whistleblower cases. It also represents whistleblowers in ongoing SEC investigations.

Whistleblower Law Collaborative LLC, based in Boston, devotes its practice entirely to representing clients nationwide in bringing actions under the federal and state whistleblower laws and programs,  False Claims Acts and other whistleblower programs.  We have extensive experience representing whistleblowers in False Claims Act and SEC matters.

If you are considering submitting a tip, complaint, or referral to the SEC or are aware of other types of fraud, contact us for a free, confidential consultation.