Image of SEC Whistleblower Program: What are the largest SEC whistleblower awards?

SEC Whistleblower Program: What are the largest SEC whistleblower awards?

Largest SEC Whistleblower Awards

Since 2012, the SEC has issued more than $266 million in awards to whistleblowers, which includes a multi-million dollar award to one of our clients. The SEC issued its two largest awards to date, $50 million and $33 million, on March 19, 2018. The third- and fourth-largest awards are $30 million, issued on September 22, 2014, and $22 million, issued on August 30, 2016.

Under the SEC whistleblower-reward program, the SEC issues awards to eligible whistleblowers who provide original information that leads to successful SEC enforcement actions with total monetary sanctions exceeding $1 million. A whistleblower may receive an award of between 10% and 30% of the total sanctions imposed.

 

The details of most awards are not publicly available because many whistleblowers file anonymously, through attorneys. The SEC goes to great lengths to not reveal any information, including any details about the enforcement action, that could expose the whistleblower.

For example, when the SEC issued $30 million to an anonymous whistleblower, it did not identify the whistleblower, indicate where the whistleblower was from, or even disclose the case that the award was tied to. Andrew Ceresney, director of the SEC’s enforcement division, simply said, “This whistleblower came to us with information about an ongoing fraud that would have been very difficult to detect.” Further, the director mentioned that the award could have been even bigger if the whistleblower had timelier reported the information to the SEC.

However, not all whistleblowers file anonymously. On August 30, 2016, the SEC issued an award of more than $22 million to a former Monsanto executive. (Note that special rules apply to certain individuals, such as executives, auditors, and compliance personnel.) According to the SEC’s press release, Monsanto lacked sufficient internal controls to account for millions of dollars in rebates. This control failure allowed the company to book a sizable amount of revenue without recognizing the costs associated with the rebates. This resulted in Monsanto’s materially misstating its consolidated earnings during a three-year period, ultimately leading to an $80 million penalty from the SEC.

See our column in Forbes:  One Billion Reasons Why The SEC Whistleblower-Reward Program Is Effective.

SEC Whistleblower Law Firm

SEC whistleblower lawyersIf you are seeking representation in a SEC whistleblower bounty case, click here, or call us at 202-262-8959 to schedule a free, confidential consultation. In 2017, Washingtonian magazine named two of our attorneys top whistleblower lawyers, and U.S. News and Best Lawyers® have named Zuckerman Law a Tier 1 firm in Litigation – Labor and Employment in the Washington DC metropolitan area.

Click here to read reviews from clients that we have represented in whistleblower rewards and whistleblower retaliation matters.

Tracking SEC Whistleblower Awards

The table below identifies some of the larger awards that the SEC has provided to whistleblowers:

Whistleblower AwardDateBasis for Whistleblower Award
$50 and $33 millionMarch 19, 2018On March 19, 2018, the SEC announced its largest-ever whistleblower awards, with two whistleblowers sharing a nearly $50 million award and a third whistleblower receiving more than $33 million.

See the SEC's order determining the whistleblowers' award claims here.
$30 millionSeptember 22, 2014A foreign whistleblower came to the SEC with “information about an ongoing fraud that would have been very difficult to detect.”

This award underscores that non-US citizens are eligible whistleblowers in the SEC Whistleblower Program.
$22 millionAugust 30, 2016A former financial executive at Monsanto exposed weaknesses in the company’s internal controls that failed to account for millions of dollars in rebates. Monsanto agreed to settle the allegations of accounting fraud for $80 million.

Importantly, external auditors, internal auditors, accountants and other compliance personnel may be eligible for awards under the SEC Whistleblower Program. Indeed, they are often best positioned to discover wrongdoing.
$20 millionNovember 14, 2016According to the SEC's order determining the whistleblower awards, three whistleblowers applied for awards related to the enforcement action. The SEC denied two of the whistleblowers' applications because they did not provide "original information," and issued the full $20 million award to one whistleblower.
$17 millionJune 9, 2016A company insider “substantially advanced the agency’s investigation and ultimate enforcement action.”

This award highlights that whistleblowers may receive an award if they provide original information regarding an open SEC investigation if it significantly contributes to the success of the action.
$16 millionNovember 30, 2017Two whistleblowers received awards of more than $8 million each for providing the SEC with critical information that led to a successful enforcement action.

This award demonstrates how whistleblowers can receive an increased award percentage for providing ongoing, extensive, and timely assistance to the SEC. As detailed in the SEC's order, the second whistleblower received the same $8 million award as the first whistleblower by providing additional significant information and ongoing assistance to the SEC that "enabled the Enforcement staff to more fully and quickly understand the misconduct and to assess the legal consequences... [which] saved a substantial amount of time and resources in the Investigation."
$14 million September 30, 2013The whistleblower exposed a fraudulent offering that targeted foreign investors who sought to gain a legal pathway to citizenship through the EB-5 Immigrant Investor Program.

Recently, there has been rise in EB-5 investment fraud. Click here to read more about how to report EB-5 fraud and earn an award.
$7 millionJanuary 23, 2017Three whistleblowers split an award of more than $7 million after helping the SEC prosecute an investment scheme.

One whistleblower provided information that was the primary reason that the SEC opened an investigation. That whistleblower received a more than $4 million award. Two other whistleblowers jointly provided new information during the SEC’s investigation that significantly contributed to the success of the SEC’s enforcement action. Those two whistleblowers will split more than $3 million.
$5.5 millionJanuary 6, 2017An anonymous whistleblower orally provided the SEC with critical information about ongoing securities fraud. Generally, the SEC requires that whistleblower provide information “in writing.” However, the SEC waived that requirement in this case due to “highly unusual circumstances” and awarded the whistleblower more than $5.5 million for the information.

This award marks the third time that the SEC has deemed it appropriate to waive a procedural requirement. The most recent exception occurred on July 27, 2017, when the SEC issued a $1.7 million whistleblower award to an insider who failed to comply with all of the whistleblower program's rules and had some culpability in the fraud. The former chief of the SEC whistleblower office said that these awards underscore the SEC’s discretionary authority to do what justice requires.
$5 millionMay 17,2016A former company insider’s detailed tip led the agency to uncover securities violations that would have been nearly impossible for it to detect but for the whistleblower’s information. The SEC's press release noted that employees are often best positioned to witness wrongdoing.
$4 million April 25, 2017The SEC issued the $4 million award to an anonymous whistleblower who provided information that led another governmental authority (not the SEC) to a successful enforcement action resulting in significant monetary sanctions.

This award highlights that SEC whistleblowers are still eligible for an award when they provide information to the SEC that leads other governmental authorities to successful enforcement actions resulting in monetary proceeds in excess of $1 million.
$4 million September 30, 2016The SEC issued the award to an anonymous whistleblower for “alter[ing] the agency to a fraud.”

The lack of publicly available information about the anonymous whistleblower and the enforcement action underscores how serious the SEC is about protecting whistleblower's. Under the program, whistleblower may report anonymously through an SEC whistleblower attorney.
$3.5 millionMay 13, 2016The whistleblower “bolstered an ongoing investigation with additional evidence of wrongdoing” which helped the SEC during settlement discussions with the company.

This award underscores how whistleblowers may still receive an award even if the SEC already has an open investigation into a matter.

$3.5 millionDecember 5, 2016A whistleblower received an award of $3.5 million for providing original information to the SEC that led to a successful enforcement action. The press release states: "Whistleblowers do a tremendous service to the investing public and we will continue to reward those who come forward with valuable tips that help us bring successful cases against those who violate the securities laws."

To learn more about the SEC Whistleblower Program, download Zuckerman Law’s eBook: SEC Whistleblower Program: Tips from SEC Whistleblower Attorneys to Maximize an SEC Whistleblower Award:

SEC Whistleblower Program Tips from SEC Whistleblower Attorneys to Maximize an SEC Whistleblower Award

 

 

SEC Whistleblower Protection

SEC whistleblowers are protected against retaliation under the anti-retaliation provisions of the Sarbanes-Oxley Act and Dodd-Frank Act.  We have substantial experience litigating whistleblower retaliation claims.  If you have suffered retaliation for whistleblowing, call us today at (202) 262-8959.

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In the SEC Whistleblower Office’s short history, it’s already issued well in excess of $100 million to whistleblowers all over the world. In 2016 alone, the SEC Whistleblower Office issued $57 million in awards to whistleblowers. Two of the biggest awards to date are for $30 million and for $17 million that were submitted by anonymous whistleblowers. In the SEC’s press release for these awards, they did not identify the individual and they did not even identify the specific enforcement action that led to that award. This shows that the SEC is committed to protecting whistleblowers’ confidentiality, even in the biggest of cases.

Avatar of Jason Zuckerman

Jason Zuckerman, Principal of Zuckerman Law, litigates whistleblower retaliation, qui tam, wrongful discharge, and other employment-related claims. He is rated 10 out of 10 by Avvo, was recognized by Washingtonian magazine as a “Top Whistleblower Lawyer” in 2015 and selected by his peers to be included in The Best Lawyers in America® and in SuperLawyers.

Avatar of Matthew Stock

Matthew Stock is an associate at Zuckerman Law, where his practice focuses on representing whistleblowers in whistleblower rewards and whistleblower retaliation cases. He is also a Certified Public Accountant, Certified Fraud Examiner, and former KPMG external auditor.