The Securities Exchange Commission (SEC) Office of Whistleblowers announced another record-breaking year in whistleblower rewards. In fiscal year (FY) 2022, the SEC awarded 103 recipients $229 million. This is the second-highest result of any year in the amount awarded and the number of awards. The SEC total paid to whistleblowers now tops $1.3 billion spread across 328 awards. This number is a percentage of the $6.3 billion total in sanctions that the SEC has levied since 2012. This total includes $4 billion in ill-gotten gains and interests that are returned (or will be returned) to investors.
The whistleblower’s critical role in providing tips and evidence led to a wide range of enforcement actions that protected the marketplace and investors. Moreover, the SEC received the highest number of tips ever in FY 2022, getting 12,300 tips. This record number indicates that whistleblowers feel comfortable reporting alleged financial wrongdoing to the SEC because they know they receive protection and confidentiality if requested. Of course, they also receive 10-30% of the total amount recovered if the SEC uses their information in one of its actions. The top award for the year was 32 million to an individual and another 8 million to the second whistleblower for the same case. There was also $37 million shared jointly by two whistleblowers.
Examples of important claims
There were 70 covered actions in FY 2022. Some highlighted examples include:
- Individuals who saw bad behavior and reported it and provided key documents
- A compliance officer who notified the SEC when the company ignored the problem
- Outsiders presenting independent analysis that proved valuable to the commission
It is worth noting that one potential whistleblower provided the SEC with enough information to launch an investigation but then made false statements during the investigation and their application for whistleblower status.
Another big year on the horizon
The SEC announced on November 28 that it awarded $20 million to a whistleblower who provided crucial information for an enforcement action. The commission will include this amount in its FY 2023 tally. Those with questions or concerns on whistleblower matters can contact attorneys with specialized knowledge to assist clients wishing to report a tip.