In separate enforcement actions, the SEC ordered its first two whistleblower awards for 2020.
In the first action, the SEC paid more than $277,000 to a whistleblower who provided "significant information" related to an ongoing fraud scheme affecting retail investors. In the second action, the SEC awarded $45,000 to a harmed investor who was not the source of the investigation but was critical in aiding the SEC to recover assets that were eventually returned to the victims.
Since the start of the SEC Whistleblower Program in 2012, the SEC has awarded approximately $387 million to 72 individuals. Whistleblowers may be eligible for an award if they voluntarily provide the SEC with original, timely and credible information that leads to a successful enforcement action. Whistleblower awards range from 10 percent to 30 percent of the money collected by the SEC when the monetary sanctions exceed $1 million.
Commentary
The first whistleblower awards of 2020 were to individuals who provided information regarding fraudulent schemes that harmed retail investors. Ever since the establishment of its Retail Strategy Task Force in 2018, the SEC has taken every opportunity to highlight its commitment to protecting Main Street investors. Though the awards were small in comparison to those issued over the past two years – several of which topped $30 million - the willingness of the SEC to pay these awards, even when one of the whistleblowers was not the source of the investigation, demonstrates a continuing commitment to protect retail investors and incentivize all parties to come forward with information about potential wrongdoing.
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