Securities fraud whistleblower will receive more than $14 Million in reward for reporting corporate fraud under the SEC’s Whistleblower Program.
October 9, 2013 – On October 1, 2013, the Securities Exchange Commission (SEC) announced that more than $14 million will be awarded to a securities fraud whistleblower that provided original information to the SEC under the SEC Whistleblower Program. The $14 million whistleblower award is the largest one in the Program’s short history and is based on the SEC’s recognition that the information provided by the whistleblower was original and that it enabled the SEC to investigate and seek recovery in an enforcement matter more quickly. In this case, the SEC was able to bring an enforcement action less than six months after receiving the whistleblower’s securities fraud tip.
Under the SEC Whistleblower Program, established in 2011 under Dodd-Frank, whistleblowers who provide original and credible information to the SEC which leads to an SEC enforcement action resulting in the recovery of $1 million or more are eligible for an award. If a recovery is made, the whistleblower is entitled to 15-30% of the recovery. In addition, none of the funds used to pay the whistleblower’s bounty are taken from the fund used to compensate the victims of the defendant’s securities fraud.
To be “original,” the whistleblower’s information must be “derived from the independent knowledge or analysis” of the whistleblower and cannot already be “known to the Commission from any other source, unless the whistleblower is the original source.” While anyone with such original information regarding securities fraud can make a report as a whistleblower under the SEC’s Whistleblower Program, you must be represented by an attorney in order to bring your claim anonymously.
The latest $14 million SEC whistleblower award is the largest one in the SEC Whistleblower Program’s nearly three year history. The promise of anonymity and awards like this are meant to incentive whistleblowers with valuable information to come forward. If you have information about financial or securities fraud, contact the corporate fraud attorneys at Levy Konigsberg LLP for a free, confidential consultation.