SEC Pay $83mn Whistleblower – Largest Ever

On Mar. 19, SEC announced largest whistleblower award of $83mn.

  • Highest-ever Dodd-Frank awards, with two whistleblowers sharing nearly $50mn and a third whistleblower receiving over $33mn,
  • The previous high was $30mn paid in 2014,
  • Provided significant information, enabled SEC to pursue, remedy serious violation,
  • Hope to encourage others with specific, high-quality information to report to SEC.

Law Firm Statement

  • Law firm Labaton Sucharow, represented whistleblowers, called landmark action.
  • Followed Merrill Lynch paying $415mn to settle charges it misused customer cash, to generate profits for firm, and failed to safeguard customer assets.
  • Firm misused customer funds that should have been deposited in reserve account.

Whistleblower Program

  • SEC has awarded more than $262mn to 53 whistleblowers since first one in 2012.
  • All payments are made out of an investor protection fund established by congress.
  • Financed entirely from monetary sanctions paid to SEC by securities law violators.
  • Said no money has been taken, or withheld from harmed investors to pay awards.
  • Paid on original, timely, and credible information that leads to enforcement action.
  • Awards range from 10% to 30% of the money collected, for sanctions over $1mn.
  • By law, SEC protected whistleblower confidentiality, and does not disclose identity.