The largest SEC whistleblowers reward given in 2021
A whistleblower can be one of the most potent weapons in the law enforcement arsenal of the Securities and Exchange Commission. Whistleblowers can help the Commission identify possible fraud and other violations much earlier than might otherwise have been possible. That’s why Congress authorises the Commission to provide monetary awards – under the SEC Whistleblower Reward Program – to eligible whistleblowers with high-quality original information leads to enforcement actions with total monetary sanctions (penalties, disgorgement, and interest) over $1 million.
Under the SEC Whistleblower Reward Program, a whistleblower may receive between 10% to 30% of the monetary sanctions collected. Since 2012, the Commission (SEC) has issued more than $1 billion in awards to whistleblowers (with the most significant award to date at $114 million).
Check out some of the most common tips to the Commission (SEC Office) of the Whistleblower. The program allows whistleblowers to submit anonymous tips to the SEC. For more on U.S. Securities and Exchange Commission and the SEC Whistleblower Reward Program, read the 2021 Annual Report to Congress.
Here is a list of seven of the largest SEC whistleblowers rewards given in 2021:
- On May 20, 2021, the SEC issued awards totalling $22 million to two whistleblowers whose information and assistance was of “crucial importance to successful SEC enforcement actions brought against a financial services firm.” According to the SEC’s press release: “The first whistleblower received an award of $18 million, while the second whistleblower received a $4 million award [because] the first whistleblower was the initial source of the investigation while the second whistleblower submitted information much later after the investigation was already underway.”
- On June 2, the Commission issued two awards of approximately $13 million and $10 million to two whistleblowers whose information and assistance led to successful SEC and related actions: “The whistleblowers’ information and assistance led to multiple successful enforcement actions related to a complex and fraudulent scheme involving multiple individuals and tens of millions of dollars in ill-gotten gains.”
- On May 17, the SEC awarded almost $27 million to two whistleblowers who provided SEC staff with “new information and assistance during an existing investigation, including meeting with the staff in person on multiple days.” According to the SEC’s press release, the whistleblowers’ “information and cooperation helped the Commission bring the enforcement action, which resulted in the return of millions of dollars to harmed investors.”
- On May 19, the SEC announced an award to a whistleblower totalling more than $28 million in connection with an SEC enforcement action and a related action by another federal agency. The whistleblower’s information caused the SEC and the other agency to open investigations that resulted in significant enforcement actions.
- The Securities and Exchange Commission announced on September 24 an award of approximately $36 million to a whistleblower “whose information and assistance significantly contributed to the success of an SEC enforcement action and actions by another federal agency.” According to the SEC’s press release announcing the award, “the whistleblower provided crucial information on an illegal scheme to the SEC’s and the other agency’s staff, including multiple meetings and the identification of key documents and witnesses. Under the SEC’s whistleblower program, individuals who provide critical information to other agencies may be eligible for a related action award if they are eligible for an award in the underlying SEC action.”
- On April 15, 2021, the SEC announced a $50 million award to joint whistleblowers. The press release announcing the award stated, “The joint whistleblowers provided exemplary assistance to the SEC staff during the investigation, including meeting with staff numerous times and providing voluminous detailed documents. The information provided by these individuals resulted in the return of tens of millions of dollars to harmed investors.”
- On September 15, 2021, the SEC announced its second-largest whistleblower award of $110 million. According to the press release announcing the award, the award consists of an approximately $40 million award in connection with an SEC case and a roughly $70 million award arising out of related actions by another agency. With the award, the SEC Whistleblower Program has now paid more than $1 billion in awards to whistleblowers.
ISO 37002 Whistleblowing Management Systems – Guidance
ISO 37002 Whistleblowing Management Systems. The International Organization for Standardization (ISO) has developed new guidelines for whistleblowing management systems — ISO 37002:2021. ISO 37002 provides guidelines for implementing, managing, evaluating, maintaining and improving a robust and effective whistleblowing management system. But what does it mean in practice, and how can it improve and add value to an organisation’s existing whistleblowing programme?
The ISO Whistleblowing Guidelines assist organisations in creating whistleblowing management systems based on trust, impartiality, and protection principles. The guidelines are adaptable, and their use will vary with the size, nature, complexity, and jurisdiction of the organisation’s activities. The ISO Whistleblowing Guidelines can assist an organisation in improving its existing whistleblowing policy and procedures or in complying with applicable whistleblowing legislation.
ABAC® program assessment and Gap Analysis process involves:
- A comprehensive review to affirm initial buy-in of the organisation’s risk management program beginning with top-level management;
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- A review of training programs for personnel;
- An audit of systems and procedures to ensure processes are up to date;
- Staging scenarios to gauge the effectiveness of program implementation;
- An audit of all steps required to identify, report and resolve red flag issues.
Anti-Bribery Anti-Corruption (ABAC®) Center of Excellence is an independent certification body that provides education and certification services for individuals and organisations on a wide range of disciplines and ISO standards, including:
- ISO 31000:2018 Risk Management- Guidelines;
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- ISO 37301:2021 (formerly ISO 19600) Compliance Management system (CMS);
- Anti-Money Laundering (AML); and
- ISO 37001:2016 Anti-Bribery Management Systems ABMS.
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If you are seeking to validate or expand your existing compliance frameworks to maintain a competitive edge in the world marketplace, ABAC® can help you. Our experts audit your existing compliance and anti-bribery anti-corruption management systems to assess effectiveness and vulnerabilities while ensuring your organisation complies with Internal Standards, FCPA rules, UK Bribery Act laws, Anti-Money Laundering regulations, and all other global, regional and local regulations.
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