Monday, June 8, 2020


The U.S. Securities and Exchange Commission awarded nearly $50 million to a whistleblower – its largest-ever sum to a single person in a case where someone who gave firsthand information about a company’s misconduct resulted in a large amount of money returned to harmed investors. The SEC said in an order that the unnamed whistleblower’s “information was highly significant,” as it “provided firsthand observations of misconduct by the company that was previously unknown to the staff.” The information “laid out in detail substantial aspects of the scheme and provided a road map for the investigation” that led to the commission’s bringing an enforcement action, the order says. The SEC’s order notes, “Claimant 1’s information allowed the Commission to bring an enforcement action that . . . returned a significant amount of money to those harmed by the company’s misconduct.” 
            The $50 million award eclipses $39 million awarded to an individual in 2018. Two individuals shared an award of nearly $50 million that same year, according to the SEC. “This award is the largest individual whistleblower award announced by the SEC since the inception of the program, and brings the total awarded to whistleblowers by the SEC to over $500 million, including over $100 million in this fiscal year alone,” Jane Norberg, chief of the SEC’s Office of the Whistleblower, said in a statement. “Whistleblowers have proven to be a critical tool in the enforcement arsenal to combat fraud and protect investors.” 
Whistleblowers awards range from 10% to 30% of the many collected when the monetary sanctions exceed $1 million, meaning this case involved at least $500 million in sanctions. Steven Peikin, co-director of the SEC’s Division of Enforcement, said in a recent speech that from mid-March to mid-May, the Commission received 4,000 whistleblower tips, 35% more than the same period the year before. There were 5,200 in all of 2019. 
Cosgrove Law Group, LLC has experience representing confidential SEC whistleblowers, both during and after the end of their tenure of employment. Food for thought.

No comments:

Post a Comment