The SEC has made its first whistleblower award of 2024, with an individual awarded more than $37m for assistance. The SEC said that the whistleblower, previously not known to the Commission, “significantly contributed” to a successful enforcement action.
The whistleblower also helped speeding up the investigation by assisting enforcement staff by identifying potential witnesses and documents.
“Today’s award illustrates the importance of the SEC’s whistleblower program, as the whistleblower’s information helped the agency return millions of dollars to harmed investors,” said Creola Kelly, Chief of the SEC’s Office of the Whistleblower.
2023 a record year
Last year was a ‘record year’ with more than $501m awarded to whistleblowers by the SEC. Nine successful SEC enforcement and other related actions resulted from the tips.
More actions have been taken previously, but with lower awards on average. The busiest year was 2021, where over 50 actions were undertaken and more than $453m awarded to whistleblowers.
There were awards of $214.5m in 2022, with 25 actions taken, and 2020 saw 40 actions undertaken with the awards exceeded $348m.
Since issuing its first award in 2012, the SEC has awarded more than $1.96 billion to whistleblowers.
Biggest award of $279m
The largest ever whistleblowing award by the SEC came in May 2023, when $279m was given to one whistleblower for their assistance in relation to a bribery case against Swedish telecommunications company Ericsson.
The SEC has never commented on the case or formally identified the company or the tipster, but Kelly said that the whistleblower’s assistance, which included multiple interviews and written submissions, was critical to the success of the regulatory actions. “While the whistleblower’s information did not prompt the opening of the Commission’s investigation, their information expanded the scope of misconduct charged.”
Gurbir S Grewal, Director of the SEC’s Division of Enforcement, said that the size of the award “not only incentivizes whistleblowers to come forward with accurate information about potential securities law violations, but also reflects the tremendous success of our whistleblower program”.
“Today’s award illustrates the importance of the SEC’s whistleblower program, as the whistleblower’s information helped the agency return millions of dollars to harmed investors.”
Creola Kelly, Chief of the SEC’s Office of the Whistleblower
The awards, which can range from 10% to 30% of the money collected when the monetary sanctions exceed $1m, understandably varied in size. The money is paid out of an investor protection fund established by Congress, which is financed entirely through monetary sanctions paid to the SEC by securities law violators.
CFTC whistleblower awards
The CFTC also issues whistleblower awards, though not in the same volume as the SEC. So far, the CFTC has made out two whistleblower awards this year. In June, one individual was awarded $4.5m for providing detailed industry information which supported an enforcement action. And the first one was awarded about $1.25m in March for reporting on misconduct. It was also the first award to apply under the CFTC’s 120-day safe harbor provision.
Last year, the CFTC issued a total of three awards totalling $33.3m – which were issued to four whistleblowers, a significant jump from the total of $11.125m in total awards paid out in 2022.
| Year | Number of whistleblowers | Total amount |
|---|---|---|
| 2024 | 2 | $5.75m |
| 2023 | 4 | $33.3m |
| 2022 | 7 | $11.125m |
| 2021 | 4 | $204m |
| 2020 | 12 | $18.25m + ‘undisclosed’ further awards |
| 2019 | 7 | $16m |
| 2018 | 3 to 5* | $75.07m |
| 2017 | – | – |
| 2016 | 2 | $10.05m |
| 2015 | 1 | Approximately $290,000 |
| 2014 | 1 | Approximately $240,000 |
The CFTC’s biggest award to date was issued in 2021, when one whistleblower was awarded $200m for information that contributed to an already open investigation. It resulted in successful CFTC enforcement action and two related actions by a US federal regulator, as well as by a foreign regulator. This pay out meant that 2021 was also the year of the largest combined awards total of $204m in total.
The largest number of awards were paid out in 2020, with six awards going to 12 whistleblowers.
Since 2014, the CFTC has granted whistleblowers more than $370m. And the awards are connected with enforcement actions that have resulted in monetary sanctions totalling more than $3.2 billion.
