On August 4, the U.S. Securities and Exchange Commission (SEC) announced $104 million in whistleblower awards issued to seven individuals who all aided in the success of an SEC enforcement action and related actions carried out by another agency. The combined award is the fourth largest in the history of the SEC Whistleblower Program.

“These awards are objective proof that whistleblowing works, and works better than anyone anticipated,” said Stephen M. Kohn of Kohn, Kohn & Colapinto. “Whistleblowers are the eyes and ears of enforcement, and are essential in holding fraudsters accountable.”

“Let’s hope that Congress gets the message and passes the pending reform laws, including the bill creating a Dodd-Frank remedy for the Consumer Financial Protection Bureau and the SEC Whistleblower Reform Act,” Kohn continued.

Through the SEC Whistleblower Program, qualified whistleblowers, individuals who voluntarily provide the agency with original information that leads to a successful enforcement action, are entitled to monetary awards of 10-30% of the funds collected by the government. Under the Dodd-Frank Act’s related action provisions, SEC whistleblowers are entitled to 10-30% of the funds collected in any related action as well as in the relevant SEC enforcement action.

“Today’s awards show that specific and credible information plays an integral part in the SEC’s enforcement efforts,” said Creola Kelly, Chief of the SEC’s Office of the Whistleblower. “These whistleblowers provided information that helped Enforcement staff detect and prosecute wrongdoing in a timely manner.”

According to the SEC, the seven whistleblowers “were composed of two sets of joint claimants and three single claimants, and each provided information that either prompted the opening of or significantly contributed to an SEC investigation.”

The whistleblowers’ assistance to the investigation included “providing documents supporting the allegations of misconduct, sitting for interviews, and identifying potential witnesses,” the SEC further notes.

The SEC order notes that a number of the whistleblowers are foreign nationals and that the misconduct occurred in multiple “Territories,” underscoring the transnational reach of the SEC Whistleblower Program.

Introduced in March, the bipartisan SEC Whistleblower Reform Act of 2023 addresses a few issues currently affecting the SEC Whistleblower Program, including the lack of anti-retaliation protections for internal whistleblowers.

Also introduced in March, the Financial Compensation for CFPB Whistleblowers Act follows much of the framework and structure of the highly regarded whistleblower provisions of the Dodd-Frank Act, which established the SEC Whistleblower Program.

SEC Awards More Than $104 Million to Seven Whistleblowers

Geoff Schweller also contributed to this article.