SEC Announces Largest Award to Date - Whistleblower Will Receive $114 Million

The Securities and Exchange Commission has just announced a record-breaking $114 million whistleblower award. A separate entity was involved in the fraud investigation that led the SEC to award $52 million and the other agency to award $62 million to an unidentified financial industry insider.

The announcement comes on the heels of a $50 million award, which was announced in June. The agency has awarded over $200 million to whistleblowers in 2020 alone, and the program’s total since the implementation of the Dodd-Frank Act will soon surpass $700 million.

The SEC whistleblower program has had a tremendous impact on Wall Street. In fact, New York whistleblowers have submitted nearly 1,000 tips since its inception, second only to Californians, with over 2,000 tips. When the Commission’s 100th whistleblower award was announced last month, the National Law Review said, "These 100 whistleblowers, almost all of whom are confidential and anonymous, have changed Wall Street forever. Their ability to detect frauds and assist in the successful prosecution of securities law violations demonstrates the invaluable role whistleblowers play in protecting investors and ensuring accountability."

Upon the latest award announcement, SEC Chairman Jay Clayton referred to the $114 million payout as a “milestone award" and, "a testament to the Commission’s commitment to award whistleblowers who provide the agency with high-quality information.” In a context where the agency has just approved rule changes that change the way it determines awards, Clayton emphasized its commitment to "getting more money to whistleblowers as quickly and as efficiently as possible.”

The SEC does not disclose the identity of fraudsters or tipsters. The head of its Office of the Whistleblower, Jane Norberg, said in a press release that this particular insider had repeatedly tried to report the alleged misconduct internally, to no avail. “After repeatedly reporting concerns internally, and despite personal and professional hardships," the SEC official said, "the whistleblower alerted the SEC and the other agency of the wrongdoing and provided substantial, ongoing assistance that proved critical to the success of the actions.”

The award sets an important precedent in terms of how seriously companies should take internal fraud reporting. According to Norberg, "companies should take reports from whistleblowers seriously," because they must be aware that the SEC will eventually learn about the violations and launch an investigation.

The U.S. Securities and Exchange Commission Whistleblower Award Program enables individuals to report securities fraud confidentially. If a tip leads to a successful enforcement action involving monetary sanctions over $1 million, the whistleblower can receive between 10 and 30 percent of the amount collected by the SEC. With the new award determination rule, whenever the maximum award is under $5 million, the tipster will always get a 30 percent share of the total fines.


Steve Halperin

New York trial attorney Steve T. Halperin is a well-known litigator with extensive knowledge of whistleblower laws and the New York False Claims Act. He has 28 years of experience as one of New York’s top tier attorneys. From the Manhattan offices of HalperinBikel, Steve’s whistleblower cases can run the gamut from lawsuits against healthcare. Whistleblowers: A New Yorker’s Step By Step Guide systems and providers cheating on New York Medicaid to private companies providing worthless services, or false billings by government contractors. With hundreds of winning verdicts and favorable settlements in healthcare and corporate cases, attorney Halperin’s meticulous preparation, courtroom acuity, and client-centered professionalism create remarkable outcomes.

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