The Securities and Exchange Commission on March 26 announced awards totaling $50 million to two whistleblowers whose high-quality information assisted the agency in bringing a successful enforcement action. One whistleblower received an award of $37 million and the other received an award of $13 million.

The $37 million award is the Commission’s third-highest award to date after the $50 million award made in March 2018 to joint whistleblowers and a more than $39 million award announced in September 2018.  

Jordan Thomas, chair of the whistleblower representation practice of law firm Labaton Sucharow, served as counsel to the whistleblower who received the $13 million award. That whistleblower was a J.P. Morgan executive who reported a tip to the SEC that led to a massive enforcement action against J.P. Morgan Securities (JPMS) and JPMorgan Chase Bank (JPMCB) concerning securities violations for failing to disclose conflicts of interest to clients. The whistleblower cooperated in the agency’s investigation. The case, in which JPMS and JPMCB agreed to pay $267 million to the SEC to settle the charges in December 2015, is one of the largest enforcement actions initiated by an SEC whistleblower since the SEC Whistleblower Program was enacted.

“Whistleblowers like those being awarded today may be the source of ‘smoking gun’ evidence and indispensable assistance that strengthens the agency’s ability to protect investors and the capital markets,” said Jane Norberg, chief of the SEC’s Office of the Whistleblower. “These awards show how critically important whistleblowers can be to the agency’s investigation and ability to bring a case to successful and efficient resolution.”

The SEC has now awarded approximately $376 million to 61 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. Whistleblowers may be eligible for an award when they voluntarily provide the SEC with original, timely, and credible information that leads to a successful enforcement action. Whistleblower awards can range from 10 percent to 30 percent of the money collected when the monetary sanctions exceed $1 million.

The SEC protects the confidentiality of whistleblowers and does not disclose information that could reveal a whistleblower’s identity as required by the Dodd-Frank Act.

Jaclyn Jaeger is a freelance contributor to Compliance Week after working for the company for 15 years. She writes on a wide variety of topics, including ethics and compliance, risk management, legal, enforcement, technology, and more.

Topics