SEC issues top-10 whistleblower award at $36M

The individual to receive the bounty served as a key informant in the lead-up to successful enforcement actions by the SEC and another federal agency. The whistleblower “met with Enforcement staff on multiple occasions, provided information that allowed Enforcement and Other Agency staff to identify and request key documents, and provided crucial information regarding the illegal scheme,” the SEC explained.

The award total slots as the eighth-highest announced by the SEC since distributing its first payout in 2012. Of the top 10, four have been announced this fiscal year, including the agency’s first two bounties to surpass $100 million.

Still, the $36 million total was not the maximum award applicable in this instance, as the claimant “unreasonably delayed reporting to the Commission for over five years” and “was culpable in the underlying scheme,” the SEC stated. The agency does not reveal the specific percentage applied to the award—only that it is 10 to 30 percent of the money collected when fines exceed $1 million—but in this case, it stated the payout “strikes the appropriate balance between Claimant 1’s significant contributions to the success of the Covered Action and Claimant 1’s unreasonable reporting delay and level of culpability.”

Two other claimants were denied shares of the award for not supplying information that substantially contributed to the success of the agencies’ enforcement actions.

The SEC has awarded approximately $1.1 billion to 214 individuals since 2012. Approximately half that total has come this fiscal year, which will end Sept. 30. All payments are made from an investor protection fund established by Congress that is financed entirely through monetary sanctions paid to the SEC by securities law violators.

The SEC neither identifies whistleblowers, nor discloses information that could reveal a whistleblower’s identity.