Washington D.C., Feb. 23, 2021 — story from SEC.
The Securities and Exchange Commission today announced an award of more than $9.2 million to a whistleblower who provided information that led to successful related actions by the U.S. Department of Justice, one of which was a non-prosecution agreement (NPA) or deferred prosecution agreement (DPA). The whistleblower previously received an award for contributions to an SEC enforcement action based on the same information that supported the award for the related actions, a prerequisite for eligibility for a related-action award.
The whistleblower provided significant information about an ongoing fraud to the SEC that enabled a large amount of money to be returned to investors harmed by the fraud. The SEC in turn provided that information to the DOJ. The whistleblower also provided significant assistance by traveling at the whistleblower’s own expense to be interviewed by DOJ.
The award announced today marks the first SEC whistleblower award announcement based on a NPA or DPA with DOJ since amendments to the SEC’s whistleblower program rules became effective on Dec. 7, 2020. Among other things, those amendments deem a DOJ NPA or DPA entered into after July 21, 2010, to be an administrative action that may be a “related action” that is eligible for a whistleblower award from the SEC.
“This award reflects the Commission’s determination that a whistleblower’s eligibility for an award should not depend on the procedural vehicle a federal agency selects to resolve an enforcement matter,” said Jane Norberg, Chief of the SEC’s Office of the Whistleblower. “Deserving whistleblowers, like today’s awardee, will be rewarded regardless of the path used to successfully conclude the matter.”
The SEC has awarded more than $750 million to 136 individuals since issuing its first award in 2012. All payments are made out of an investor protection fund established by Congress that is financed entirely through monetary sanctions paid to the SEC by securities law violators. No money has been taken or withheld from harmed investors to pay whistleblower awards. (However, financial harm does occur to investors due to lost financial gains as well as the initial investment in the stock as values normally may fall and sometimes become worthless.) Whistleblowers may be eligible for an award when they voluntarily provide the SEC with original, timely, and credible information that leads to successful enforcement action. Whistleblower awards can range from 10 percent to 30 percent of the money collected when the monetary sanctions exceed $1 million.
As set forth in the Dodd-Frank Act, the SEC protects the confidentiality of whistleblowers and does not disclose information that could reveal a whistleblower’s identity.
For more information about the whistleblower program and how to report a tip, visit: www.sec.gov/whistleblower