In January 2022, the Securities and Exchange Commission (SEC) announced it awarded four whistleblowers $40 million after voluntarily providing information and assisting the SEC in three separate actions.

Two individuals were awarded $37 million after providing key evidence contributing to the SEC’s success. The witnesses also continued assisting the SEC and helped the staff identify additional information that advanced the investigation.

The SEC issued a third person $1.8 for providing critical, new information that prompted the SEC staff to investigate the misconduct. This witness also continued to assist the SEC with interviews and additional documents.

Finally, a fourth whistleblower provided additional information that “shaped staff’s investigative strategy” and contributed to the SEC’s success. All four award recipients continued to help the SEC after the initial claim.

What Is A Whistleblower?

The SEC defines whistleblowers as people who voluntarily provide the SEC with original information about a possible violation of federal securities laws. Awards can range from 10 percent to 30 percent of the money collected when the monetary sanctions exceed $1 million. Since 2012, the SEC has awarded approximately $1.2 billion to 245 individuals. Congress established an investor protection fund to pay out these awards. The fund receives money from sanctions paid by securities law violators.

Legal Protections for Whistleblowers

The SEC protects the confidentiality of informants and does not disclose any information that could reveal a witness’s identity. The SEC redacted the identities discussed in this blog and the percentage each collected from the sanctions. We previously blogged on SEC whistleblower protections in this space.