SEC Whistleblower Award Criteria: Law Enforcement Interest
SEC Grants Over $14 Million Whistleblower Award
One of the SEC whistleblower award criteria that the Commission may consider in determining the amount of an award is the Commission’s law enforcement interest.
The law enforcement interest, along with other SEC whistleblower award criteria, played a role in the Commission’s decision to grant one whistleblower an award of over $14 million.
SEC Whistleblower Award Criteria That Factored Into The $14 Million Award
In its Proposed Final Determination, the SEC’s Claims Review Staff (“CRS”) recommended granting the SEC whistleblower reward. The Commission adopted the CRS’s recommendation in its Order granting the award.
The SEC Order
The Commission’s Order did not contain much factual detail about what the whistleblower did to earn the $14 million award. However, it did mention a few general SEC whistleblower award criteria that the CRS took into consideration.
The CRS recommended that the whistleblower receive an award because he or she voluntarily provided original information to the SEC that led to the successful enforcement of the SEC’s action.
The Order then stated that the CRS recommended an amount for the award. Although the actual amount was redacted, the Order mentioned that it would result in an SEC whistleblower reward of more than $14 million.
According to the Order, that amount appropriately recognized both the “significance of the information” and “the assistance” that the whistleblower provided to the SEC.
In addition, one of the SEC whistleblower award criteria that the Order referred to was the SEC’s law enforcement interest.
The Order stated that the amount of the award appropriately recognized “the law enforcement interest in deterring violations by granting” SEC whistleblower rewards.
The SEC’s Press Release About The Award
The SEC’s press release about the award provided a bit more detail about the SEC whistleblower award criteria and what the whistleblower did to earn the $14 million award.
The SEC’s press release
According to the press release, the whistleblower’s information and assistance:
… allowed the SEC to investigate an enforcement matter more quickly than otherwise would have been possible. Less than six months after receiving the whistleblower’s tip, the SEC was able to bring an enforcement action against the perpetrators and secure investor funds.
Elsewhere, the press release explained that the SEC was able to recover “substantial investor funds”.
Comments By Senior SEC Officials About The Award
In the SEC’s press release, both the Chair of the SEC and the Chief of the SEC’s Office of the Whistleblower commented on the award.
The Chair remarked that the SEC whistleblower program “has had a big impact on our investigations by providing us with high quality, meaningful tips”. She then expressed the Commission’s hope that “an award like this encourages more individuals with information to come forward”.
The Chief of the Office of the Whistleblower added:
While it is certainly gratifying to make this significant award payout, the even better news for investors is that whistleblowers are coming forward to assist us in stopping potential fraud in its tracks so that no future investors are harmed.
Additional Information
For additional information about SEC whistleblower award criteria, click on the links below:
- The SEC’s September 30, 2013 Order. (External link to the SEC’s website.)
- The SEC’s press release about the award. (External link to the SEC’s website.)
