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Record-Breaking Year For SEC’s Whistleblower Award Program

According to the SEC’s Annual Report to Congress, 2018 “was a record-breaking year” for the SEC’s whistleblower award program.

OWB Chief’s Message About the SEC’s Whistleblower Award Program

SEC’s 2018 Annual Report To Congress Cover
The SEC’s 2018 Report To Congress

Each year, the U.S. Securities and Exchange Commission’s Office of the Whistleblower (“OWB”) is required to submit a report to the U.S. Congress about the SEC’s whistleblower award program.

The annual report informs Congress about the OWB’s activities, SEC whistleblower complaints received, and the SEC’s response to those whistleblower complaints.  Among other things, the report is required to address the SEC’s whistleblower award program, including the number of SEC whistleblower awards granted, the types of SEC whistleblower cases in which awards were granted, and other information.  (Report, p. 4.)

This year’s annual report on the SEC’s whistleblower award program was released publicly in November 2018.

The annual report starts with a message from the Chief of the OWB.  In the very first line of this year’s annual report, the Chief of the OWB announced that fiscal year 2018 “was a record-breaking year” for the SEC’s whistleblower award program. (Report, p. 1.)

Record Year For SEC Whistleblower Rewards Given Out

In FY 2018, the Commission gave out its largest SEC whistleblower rewards to date.  (Report, p. 1.)  One award was for almost $50 million, which was divided between two whistleblowers.  Another award was for $39 million granted to one individual.  (Report, p. 13.)

The SEC also gave out more awards in terms of dollars during FY 2018 “than in all prior years combined”. During FY 2018, the SEC gave out over $168 million to 13 SEC whistleblowers.  Since the SEC’s whistleblower award program began, the Commission has granted more than $326 million in rewards to 59 whistleblowers in 48 cases and related actions.  (Report, pp. 1, 16.)

Record Year For SEC Whistleblower Tips

In FY 2018, the Commission also received more SEC whistleblower tips “than in any other previous year”.  (Report, p. 1.)

The SEC received 5,282 whistleblower tips in FY 2018.  This was an increase of 798 tips over FY 2017.

According to the annual report, “Throughout the history of the whistleblower program, the Commission’s receipt of whistleblower tips has reflected an upward trajectory” year over year, every year.  (Report, p. 20.)

The report also noted that “In the months following the Digital Realty decision [by the U.S. Supreme Court], there was an increase in the number of whistleblower tips received by the Commission, which may have been attributable, in part, to the decision.”  (Report, pp. 2, 18.)  In February of this year, I wrote a blog about the Supreme Court’s decision in Digital Realty.  You can read that blog by clicking here. I also discussed that case live on Bloomberg Radio.  You can listen to that program by clicking here.

SEC Whistleblower Protections To Remain A Priority

Protecting whistleblowers continues to be a priority for the SEC’s whistleblower award program.  In the annual report, the Commission asserts:

Anti-retaliation protections continue to be a critical component in the success of the Commission’s whistleblower program…. enforcement actions against companies and individuals who retaliate against whistleblowers or take actions to impede whistleblowers’ communications with the Commission will remain a focus of OWB’s mission in the upcoming fiscal year.  (Report, p. 2.)

If you would like to read the FY 2018 annual report on the SEC’s whistleblower award program, you can find it on the SEC’s website by clicking here.

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The Pickholz Law Offices represents U.S. and international clients in securities and white collar cases. The Firm has helped whistleblowers report frauds to the SEC, CFTC, and IRS, and has defended clients in investigations by the SEC, CFTC, DOJ, FINRA, and other financial and securities enforcement regulators.

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Mr. Pickholz has been counsel in many high-profile cases. He was the first attorney ever to win an SEC whistleblower award on appeal to the Commission, which Inside Counsel magazine called one of the five key events in the history of the SEC whistleblower program. On the defense side, Mr. Pickholz has defended clients in the SEC’s COVID-19 investigations, the CFTC’s cryptocurrency cases, and a former US Senator, among others.

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