ARTICLE
29 January 2020

SEC Orders First Whistleblowers Awards In 2020

CW
Cadwalader, Wickersham & Taft LLP

Contributor

Cadwalader, established in 1792, serves a diverse client base, including many of the world's leading financial institutions, funds and corporations. With offices in the United States and Europe, Cadwalader offers legal representation in antitrust, banking, corporate finance, corporate governance, executive compensation, financial restructuring, intellectual property, litigation, mergers and acquisitions, private equity, private wealth, real estate, regulation, securitization, structured finance, tax and white collar defense.
In separate enforcement actions, the SEC ordered its first two whistleblower awards for 2020.
United States Corporate/Commercial Law

In separate enforcement actions, the SEC ordered its first two whistleblower awards for 2020.

In the first action, the SEC paid more than $277,000 to a whistleblower who provided "significant information" related to an ongoing fraud scheme affecting retail investors. In the second action, the SEC awarded $45,000 to a harmed investor who was not the source of the investigation but was critical in aiding the SEC to recover assets that were eventually returned to the victims.

Since the start of the SEC Whistleblower Program in 2012, the SEC has awarded approximately $387 million to 72 individuals. Whistleblowers may be eligible for an award if they voluntarily provide the SEC with original, timely and credible information that leads to a successful enforcement action. Whistleblower awards range from 10 percent to 30 percent of the money collected by the SEC when the monetary sanctions exceed $1 million.

Commentary

The first whistleblower awards of 2020 were to individuals who provided information regarding fraudulent schemes that harmed retail investors. Ever since the establishment of its Retail Strategy Task Force in 2018, the SEC has taken every opportunity to highlight its commitment to protecting Main Street investors. Though the awards were small in comparison to those issued over the past two years – several of which topped $30 million - the willingness of the SEC to pay these awards, even when one of the whistleblowers was not the source of the investigation, demonstrates a continuing commitment to protect retail investors and incentivize all parties to come forward with information about potential wrongdoing.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Mondaq uses cookies on this website. By using our website you agree to our use of cookies as set out in our Privacy Policy.

Learn More