On November 25, the U.S. Securities and Exchange Commission (SEC) published an award order granting a $2 million whistleblower award to an individual who voluntarily provided original information that led to a successful enforcement action.

According to the SEC, the anonymous whistleblower “submitted information that was highly significant because [their] tip caused the opening of the Commission’s investigation and alerted Enforcement staff to a potential investment fraud” and “provided timely cooperation and assistance to Enforcement staff early in the Commission’s investigation.”

The SEC further notes that the whistleblower’s disclosure and further assistance “helped the Commission stop an ongoing fraud and lessen the loss of investor funds.”

Under the SEC Whistleblower Program, qualified whistleblowers are eligible to receive monetary awards of 10-30% of the funds collected by the Commission in an enforcement action aided by the disclosure. The SEC weighs a number of factors in determining the exact percentage to award an eligible whistleblower.

In issuing the award, the SEC used its discretion to waive the TCR filing requirements of Rule 21F-9(b) because it determined that doing so “would be in the public interest and consistent with the protection of investors.”

Under Rule 21F-9(b), in order to qualify for an award, a whistleblower must declare under penalty of perjury at the time they submit their information that it is true and correct to the best of their knowledge and belief. In this case, the whistleblower “mistakenly failed to designate his/her TCR as a whistleblower submission and thus was not prompted by the TCR system to provide the requisite declaration.”

The SEC explains that “Enforcement staff viewed Claimant as a whistleblower throughout the investigation” and that “after being informed by Enforcement staff of the Commission’s rules, Claimant obtained counsel shortly thereafter, and submitted the same information on Form TCR with the requisite sworn declaration.”

Established in 2010 with the passage of the Dodd-Frank Act, the SEC Whistleblower Program has now awarded a total of more than $2.2 billion to 444 individuals. According to the SEC Office of the Whistleblower Annual Report to Congress for Fiscal Year 2024, during FY 2024, the SEC Whistleblower Program received a record 24,980 whistleblower tips and awarded over $255 million, the third highest annual amount.