SEC Awards $3.8 Million to Whistleblower for Assistance in Halting a Fraudulent Scheme. Exposing Misconduct.

SEC Awards $3.8 Million to Whistleblower for Assistance in Halting a Fraudulent Scheme

July 15, 2020

Award for Contributing Original Information to Ongoing Investigation

Today the SEC awarded $3.8 million to a whistleblower that provided new information during the course of an ongoing investigation into a fraudulent scheme.  According to the order announcing the award, the information that the whistleblower provided “helped the Commission halt an ongoing fraud and return millions of dollars to harmed investors.”

This award underscores that while an SEC whistleblower must provide original information to qualify for an award, a whistleblower assisting with an existing investigation can be eligible for an award.  Under Rule 21F-4(c)(2), a whistleblower who voluntarily submits original information may be eligible for an award if the information significantly contributes to the success of an enforcement action. A whistleblower’s information may “significantly contribute” to an enforcement action in several ways, including if the information:

  • allows the SEC to bring the enforcement action in significantly less time or with significantly less resources;
  • expands the scope of the current investigation, leading to additional successful claims; or
  • allows the SEC to bring claims against additional parties.
Read more here.
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