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What are SEC sanctions and penalties?

SEC Sanctions and Penalties

The U.S. Securities and Exchange Commission (SEC) obtains billions of dollars each year in monetary sanctions from wrongdoers. As a part of the SEC’s enforcement responsibilities, it issues orders and administers judgements ordering securities violators to, among other things:

  • Disgorge, or pay back, ill-gotten gains in order to return the funds to harmed investors;
  • Pay civil monetary penalties (see the calculation of civil monetary penalties); and
  • Pay interest (prejudgement and potentially postjudgement).

The calculation of monetary sanctions is critically important to SEC whistleblowers. Under the Dodd-Frank Act’s SEC Whistleblower Program, the SEC will issue awards to whistleblowers who provide original information that leads to a 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 monetary sanctions collected, which can lead to substantial awards. The largest SEC whistleblower awards to date are $50 million, $39 million and $37 million. For more information about the SEC Whistleblower Program, download the eBook: SEC Whistleblower Program: Tips from SEC Whistleblower Attorneys to Maximize an SEC Whistleblower Award.

Year-By-Year Total SEC Sanctions Since FY ’04

Annually, the SEC announces the total monetary sanctions obtained from successful enforcement actions. The table below identifies the total illegal profits that securities violators were required to disgorge and the total penalties they were required to pay.

Fiscal YearDisgorgementPenalties
2018$2.506 billion$1.439 billion
2017$2.957 billion$832 million
2016$2.809 billion$1.273 billion
2015$3.019 billion$1.175 billion
2014$4.16 billion total$4.16 billion total
2013$2.257 billion$1.167 billion
2012$2.083 billion$1.021 billion
2011$1.878 billion$928 million
2010$1.82 billion$1.03 billion
2009$2.09 billion$345 million
2008$774 million$256 million
2007$1.093 billion$507 million
2006$2.3 billion$975 million
2005$1.6 billion$1.5 billion
2004$1.9 billion$1.2 billion

For more information on SEC sanctions, see a recent speech by the SEC’s Division of Enforcement: Remedies and Relief in SEC Enforcement Actions

SEC Whistleblower Program

Under the SEC Whistleblower Program, the SEC will issue awards to whistleblowers who provide original information about a violation of the federal securities laws that leads to successful enforcement actions with total monetary sanctions in excess of $1 million. In exchange for the information, the SEC will issue an award of between 10 to 30 percent of the total monetary sanctions collected to the whistleblower. If represented by counsel, a whistleblower may submit a tip anonymously to the SEC.

In its short history, the SEC Whistleblower Program has had a tremendous impact on securities enforcement. Since the inception of the program in 2011, the SEC has received more than 28,000 whistleblower tips, some of which have enabled the SEC to recover more than $1.7 billion in monetary sanctions from wrongdoers. To date, the SEC’s Office of the Whistleblower has paid more than $384 million in awards to whistleblowers.

Violations Leading to SEC Sanctions

A tip about any violation of U.S. federal securities laws may qualify a whistleblower for an award under the SEC Whistleblower Program, including:

Tier-1 Law Firm Representing SEC Whistleblowers

If you would like more information on the SEC Whistleblower Program, contact an SEC Whistleblower Attorney at Zuckerman Law for a free, confidential consultation. Zuckerman Law is one of the nation’s leading law firms representing whistleblowers in whistleblower rewards and retaliation cases.

 

SEC Whistleblower Lawyers

How to Qualify for a SEC Whistleblower Bounty

Are Whistleblowers Protected from Retaliation?

Click here to learn more about anti-retaliation protections for SEC whistleblowers under the Dodd-Frank Act and Sarbanes-Oxley Act.

SEC whistleblower attorney

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.

Matthew Stock is the Director of the Whistleblower Rewards Practice at Zuckerman Law. He represents whistleblowers around the world in SEC, CFTC and IRS whistleblower claims. He is also a Certified Public Accountant, Certified Fraud Examiner and former KPMG external auditor.