SEC issues record awards in Q4 of 2020
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SEC issues record awards in Q4 of 2020

by | Jun 14, 2021 | Whistleblower Protection

The amount of whistleblower money issued by the SEC has trended up recently, but $176 million in the fourth quarter of 2020 was a high-water mark. It matched nearly the entire amount given in 2019, which was itself a record-setting year. Since creating an investor protection fund in 2012, the SEC has issued almost $900 million to just over 100 individual whistleblowers.

This money comes from penalties for security law violations, paid out of an investor protection fund created by Congress. If the whistleblower voluntarily comes forward, they are entitled to 10-30% of the money collected by the SEC for the successful enforcement of violations.

Some notable cases drove the exponentially increased award amounts. The Dodd-Frank Act ensures confidentiality, so the SEC does not disclose information regarding the whistleblower’s identity. Nonetheless, we can identify the award dates. It should be noted that Fischer Legal Group did not handle these cases, but they still illustrate the stakes and rewards for those who choose to come forward.

October 22

None are larger than the record $114 million awarded to a single whistleblower on October 22. According to the SEC’s press release, the whistleblower enabled the SEC to enforce rules and related actions. The amount involved $62 million tied to actions by another government agency and $52 million tied to an SEC case.

November 3

The SEC paid $28 million to a brave individual who saved the SEC time and resources by providing knowledgeable testimony and identifying a key witness. The violator was a publicly traded company, and the executives in charge of it.

November 5

The SEC awarded upwards of $3.6 million for information regarding financial misconduct occurring abroad. The individual provided information and furthered the case by subsidizing his or her travel to help the SEC build the case. This whistleblower’s actions were especially notable because it is harder for the SEC to detect fraud outside the United States but still under SEC jurisdiction.

December 18

Another upwards of $3.6 million award went to a whistleblower who provided information about a scheme to defraud investors. The individual’s actions enable the return of millions to the harmed investors. Their reward was initially partially denied because of the blame for planning the misconduct, delaying reporting it and gaining financially from the scheme. Yet, the SEC determined the whistleblower was not responsible for their actions.

More in 2021

The SEC awarded about $200 million in the first half of 2021, so it appears that it will continue to award large sums to those who put their career and life on the line and step forward. While the agency does provide protections like anonymity, it is often best to seek legal guidance before reporting a tip from attorneys who specialize in handling whistleblower cases.