Joint Whistleblowers Awarded $12 Million By SEC

On October 10th, 2024, the Securities and Exchange Commission (SEC) announced a $12 million award to a group of joint whistleblowers. The award will be split among three whistleblowers whose critical information helped the federal agency take enforcement action to stop fraud. Here, our SEC whistleblower rights attorney discusses the joint whistleblower award in more detail.

Three Whistleblowers Will Share $12 Million 

Based on successful enforcement action to stop and remedy securities fraud, the SEC has awarded $12 million in compensation to a group of three whistleblowers. They will split the joint award. The agency did not publicly disclose how much in whistleblower compensation each specific individual would receive as part of the award.

 Five Key Factors that SEC Uses to Determine How to Split a Joint Whistleblower Award 

Through the SEC Whistleblower Program, the federal agency can approve an award of between 10 percent and 30 percent of the total value of the enforcement action, if that enforcement action recovered more than $1 million. When there are joint whistleblowers, the SEC has the authority to split the award unevenly based on the specific circumstances of the case. Here are five key factors that the SEC can consider when determining how to split a joint whistleblower award:

• Significance of Information: The SEC evaluates the relevance and impact of the information provided by whistleblowers to determine its value in advancing the case. If the information directly leads to successful enforcement actions, it is deemed highly significant.
• Scope of Assistance Provided: Scope of assistance matters. The SEC can assess each whistleblower’s willingness to provide detailed explanations, the documentation they provide, and other evidence that supports the investigation. The SEC considers whether the whistleblower’s assistance helped expedite the investigation or enforcement action.
• Any Unreasonable Delay in Reporting: Delays in reporting violations can diminish the usefulness of the information. The SEC assesses the reasons behind any delays. Prompt reporting after discovering misconduct is viewed favorably.
• Culpability (or Lack Thereof): A whistleblower who bears some degree of culpability is not always disqualified from an award. However, the specific circumstances matter and any culpability can be used against them. The degree of involvement and the steps taken by the whistleblower to mitigate or rectify the wrongdoing are assessed under this factor.
• Any Interference With Internal Compliance: The SEC disfavors actions by whistleblowers that hinder or undermine the effectiveness of a company’s internal compliance systems—such as misleading internal investigations or withholding information. On the other hand, whistleblowers who attempt to address their concerns through internal compliance are not penalized.

Consult With Our Miami SEC Whistleblower Rights Attorney Today

At ​Carlson & Associates, P.A., our Florida SEC whistleblower advocacy lawyer is standing by, ready to help you navigate the program. If you have any specific questions or concerns about bringing an SEC whistleblower claim, we are here as a legal resource. Contact us today to set up your fully private, no obligation initial case review. Our firm represents SEC whistleblowers in Florida and beyond.

Source:

sec.gov/newsroom/press-releases/2024-168