The largest ever reward paid out by the Securities and Exchange Commission (SEC) was $114 million on October 22, 2020 after the relator voluntarily provided the SEC with original, timely, and credible information that lead to a successful enforcement action. This reward is the largest ever paid out by the SEC to a single whistleblower under its whistleblower program. The SEC has paid out more than a billion dollars in rewards since the program’s inception in 2011. The program has been very successful in its goals to reduce securities fraud. Under this program, whistleblowers can receive between 10% and 30% of any monetary sanctions collected if their information leads to a successful enforcement action.
Many people might think that a percentage of 10% to 30% is a small amount, but keep in mind that most cases involve millions of dollars, and the minimum amount required for any reward is $1 million dollars. That means that the smallest possible reward under the SEC Whistleblower Program is $100,000, and the best part is that you don’t actually need to wait for the guilty party to pay since all payments are made out of an investor protection fund established by Congress that is financed entirely through monetary sanctions paid to the SEC by securities law violators. No money has been taken or withheld from harmed investors to pay whistleblower awards.
One factor that helps the SEC Whistleblower Program be successful is that reward amounts are made publicly available. While SEC whistleblower cases are largely sealed and confidential, the public nevertheless has access to past reward amounts and these amounts certainly incentivize many whistleblowers with information about securities fraud to come forward with their information. For example, on September 15, 2021, the SEC paid a reward of $110 million. This is the second-highest in the program’s history.
The SEC Whistleblower Program is not the only Whistleblower Program in the United States. There are many other whistleblower programs that pay out rewards in the millions, like the False Claims Act and CFTC Whistleblower Programs, among others.
Do you have a valid claim?
If you witnessed any widespread suspicious activity within your workplace, you might have a chance of becoming a whistleblower by reporting an ongoing fraudulent scheme. However, to increase your chances of success, you must be sure to back up your claim with substantial evidence or privileged information.
A Quick Whistleblower Checklist
Is the fraudulent scheme widespread enough?
Has the fraud been perpetuated for years or involves large sums of money?
Do you possess any physical evidence of the fraud (documents, forged signatures)?
Do you have access to privileged information which may help our investigators?
Do you work as an insider within the company perpetrating the fraud?
Did you witness any ongoing illegal behavior within your workplace?
Have you been forced into taking part in any suspicious corporate activity?
