SEC Whistleblower Award Factors

If all of the conditions and requirements have been met for an SEC whistleblower award to become available, and there is a qualified and eligible whistleblower(s), the SEC must give out an award of no less than 10% and no more than 30% of the amount that it collects from the securities law violators.  The Commission has the discretion to determine the amounts of SEC whistleblower awards, which can be anywhere within that 10%-30% range.  The SEC whistleblower rules contain a lot of factors that may affect the amount of an SEC whistleblower award.

The Number Of Eligible Whistleblowers Can Affect The Amount Of An SEC Whistleblower Award

Where there is only one eligible whistleblower, he or she may be granted the entire SEC whistleblower award.

Where there is more than one eligible SEC whistleblower, the Commission determines the percentage amount to grant to each whistleblower as his or her individual portion of the award.  The combined amount of those SEC whistleblower awards taken together must equal at least 10% and no more than 30% of the amount that the SEC collects from the violators.

Factors That May Increase The Amount Of An SEC Whistleblower Award

Under the SEC whistleblower program, there are several factors that can increase the percentage amount of an individual’s SEC whistleblower reward.  The Commission has discretion to determine whether or not to give an individual SEC whistleblower credit for any or all of these factors, as well as how much credit to give the whistleblower based on them.

General factors that may increase the amount of an SEC whistleblower reward include:

factors

  • The significance of the information provided by the SEC whistleblower,
  • The nature and degree of assistance provided by the SEC whistleblower, including the timeliness of the whistleblower’s initial reporting of the information,
  • The Commission’s law enforcement interest, and
  • The whistleblower’s participation in a company’s internal compliance systems.

 

Failing to satisfy some or all of these factors does not mean that an otherwise fully-qualified whistleblower will not receive an SEC whistleblower reward.  It only means that the whistleblower will not receive an increase to the percentage amount of his or her SEC whistleblower award based on the missing factors.

Factors That May Decrease The Amount Of An SEC Whistleblower Award

The SEC whistleblower rules list several factors that may decrease the amounts of SEC whistleblower awards.  As with the possible increases, the Commission has discretion to determine whether or not to decrease an SEC whistleblower award for any or all of these factors, as well as how much to decrease the award based on these factors.

General factors that may decrease the percentage amounts of SEC whistleblower awards include:

  • The whistleblower’s own culpability or involvement in the conduct being reported, including whether the whistleblower knowingly interfered with the SEC’s investigation or related enforcement actions,
  • The whistleblower’s unreasonable delay in reporting the securities crimes or violations to the SEC, or
  • The whistleblower’s knowing interference with or undermining of a company’s internal compliance or reporting systems.

Doing one or more of the above things does not mean that an otherwise fully-qualified whistleblower will not receive any SEC whistleblower reward.  But it does mean that the percentage amount of his or her SEC whistleblower award may be reduced as a result.

Further Considerations

The factors listed above are only general categories.  The SEC whistleblower rules contain many sub-sections that set forth more information and considerations relevant to each general factor.  Individuals who have questions or concerns about any of the factors that might increase or decrease an SEC whistleblower award may want to consult with an experienced SEC whistleblower lawyer at a reputable SEC whistleblower law firm.

Additional Information

For more information about factors that may affect the payment amounts SEC whistleblower awards, click on the links below:

Grants / Increases

Joint Awards / Co-Whistleblowers

Decreases