Two Whistleblowers Receive SEC Awards Totaling $50 Million

The Securities and Exchange Commission announced on March 26, 2019, that it was awarding $50 million to two whistleblowers whose tips enabled the SEC to successfully pursue a major enforcement action. One whistleblower was awarded $37 million, while the second received $13 million. These awards were made under the highly successful program established by Congress in 2010 to reward individuals whose tips enable the SEC to recover at least $1 million.

This is the second $50 million award made by SEC in the last year, i.e., in March 2018 the SEC awarded $50 million to two other whistleblowers whose information contributed to a successful enforcement action. In total, the SEC has awarded approximately $376 million to 61 whistleblowers.

Individuals with information regarding fraud or other securities violations can disclose that information to the SEC confidentially and anonymously. In making whistleblower awards, the SEC maintains the anonymity of award recipients. Consequently, the SEC order making last week’s awards (Exchange Act Release No. 85412) does not identify the award recipients or the information they disclosed. However, other sources suggest that these whistleblowers disclosed violations by JPMorgan Chase’s investment advisory unit and that the disclosures were instrumental in the SEC’s recovery of $267 million from JPMorgan Chase.

According to the SEC order, the bulk of the $50 million award (i.e., $37 million) will go to a whistleblower whose information was the basis for one of the SEC’s claims. The whistleblower awarded $13 million likewise disclosed valuable information, but will receive a smaller award because another agency has already given that whistleblower a monetary award for similar information.

Several other individuals applied for awards based on the SEC’s successful enforcement action, but those applications were denied because the information submitted did not trigger the SEC investigation or contribute to the success of the enforcement action. Another whistleblower’s application was denied because it was filed long after the application deadline. The SEC order emphasizes that whistleblowers intending to seek a reward (or their counsel) must monitor the SEC’s website to learn the deadline for filing such an application.

The March 26 order dramatically illustrates that the SEC continues to be interested in receiving whistleblower tips and will make large monetary awards for original, specific, and valuable disclosures.

Whistleblower Aid

The foregoing is provided by Whistleblower Aid, Inc. for general information purposes and is not intended to be, and should not be, taken as legal advice.
See https://whistlebloweraid.org/contact/#whistleblower-contact for guidance on how to contact Whistleblower Aid.