SEC Awards $37 Million to Whistleblower Amidst Retaliation Claims

The Securities and Exchange Commission (SEC) has announced its second $37 million whistleblower award in as many weeks, with four claimants competing for the payout but only one emerging as the recipient. The SEC maintains the anonymity of whistleblowers and disclosed in a press release on Friday that the whistleblower reported the misconduct internally, prompting the company to conduct an internal investigation which eventually led the company to notify the agency of its findings.

The SEC also acknowledged that the whistleblower faced retaliation from their supervisors and other senior employees, “including receiving a negative performance review and a sharply lower bonus than the previous year, despite meeting the performance goals the firm had set,” the SEC stated in its order.

The agency found the whistleblower’s information to be “very helpful” and their testimony “candid and credible,” as detailed in the order.

“This individual, who was retaliated against for their whistleblowing activity, played a crucial role in the ultimate success of the enforcement proceeding,” stated Creola Kelly, chief of the SEC’s Office of the Whistleblower, in the release.

The awarded amount will be disbursed through an investor protection fund financed by penalties paid to the SEC by securities law violators. Whistleblower awards range between 10 and 30 percent of the money collected in an enforcement action when sanctions exceed $1 million.

The information provided by the three other whistleblower claimants did not significantly contribute to the success of the covered action. The SEC noted that two claimants’ information was “vague” and not related to the issues at hand.

On July 17, the SEC granted a separate $37 million award to a whistleblower who “significantly contributed” to the success of the covered action, with the misconduct initially discovered by the agency’s Division of Examinations.

By fLEXI tEAM