An anonymous whistleblower has received an award of $17 million from the Securities and Exchange Commission (SEC) in what amounts to the second largest reward ever from the agency. The whistleblower provided details that led to the recovery of a substantial sum related to securities fraud. Details regarding the whistleblower case are limited because the SEC does not disclose specifics regarding its enforcement actions or investigations. The agency protects the identity of the whistleblower by preventing disclosure of information that directly or indirectly could expose the whistleblower’s identity. However, the amount recovered in the SEC enforcement action can be estimated at between almost $56 and $170 million based on the whistleblower’s award.
The chief of the SEC Office of the Whistleblower recently announced that during the one month period before the $17 million award, the agency had provided more than $26 million among five separate whistleblowers. The SEC official indicated that he believes that these substantial rewards will motivate people who possess an awareness of federal securities violations to step forward and disclose illegal conduct to the SEC.
Most SEC whistleblower cases are initiated by company insiders such as financial advisors, investors, bookkeepers, tellers, bankers and others uniquely situated to discover conduct and schemes designed to defraud the government. Whistleblowers who disclose SEC violations protect the government, taxpayers, and investors. Eligibility for a reward is based on providing original information that facilitates the recovery of funds obtained by defrauding the government or securities violations. The enforcement action must involve sanctions exceeding a million dollars.
The amount provided as a cash reward will amount to between ten and thirty percent depending on certain factors, which include the extent of the participation by the whistleblower and the nature of the information provided to the SEC. The funds awarded to the whistleblower are paid from a fund established by Congress for the protection of investors. Further, the reward does not involve any cost to taxpayers or investors who experience economic harm stemming from the securities violations.
A growing number of whistleblowers have come forward to report securities violations to the SEC in recent years, especially during the last five year period. During 2015, the SEC received an all-time high 3,923 reports of illegal securities activity. The total represented an eight percent increase over the previous year. Approximately 37 million dollars were awarded among eight whistleblowers last year. To put this amount of award money in perspective, the awards to whistleblowers in 2015 account for nearly seventy percent (68 percent) of the total amount paid by the SEC since the establishment of the SEC whistleblower program.
If you have information about a scheme or actions to defraud the government or securities violations that harm investors, you might be entitled to a substantial financial recovery if you blow the whistle. At Barrett Law, we are here to help. Contact our Mississippi Qui Tam Attorneys today at 800-707-9577 to schedule your free consultation, so we can answer any questions you may have regarding filing your claim.