SEC Announces Its Largest-Ever Whistleblower Awards

 

SEC.gov

FOR IMMEDIATE RELEASE
2018-44

Washington D.C., March 19, 2018 —

The Securities and Exchange Commission today announced its highest-ever Dodd-Frank whistleblower awards, with two whistleblowers sharing a nearly $50 million award and a third whistleblower receiving more than $33 million.  The previous high was a $30 million award in 2014.

“These awards demonstrate that whistleblowers can provide the SEC with incredibly significant information that enables us to pursue and remedy serious violations that might otherwise go unnoticed,” said Jane Norberg, Chief of the SEC’s Office of the Whistleblower.  “We hope that these awards encourage others with specific, high-quality information regarding securities laws violations to step forward and report it to the SEC.”

The SEC has awarded more than $262 million to 53 whistleblowers since issuing its first award in 2012.  All payments are made out of an investor protection fund established by Congress that is financed entirely through monetary sanctions paid to the SEC by securities law violators.  No money has been taken or withheld from harmed investors to pay whistleblower awards.

Whistleblowers may be eligible for an award when they voluntarily provide the SEC with original, timely, and credible information that leads to a successful enforcement action. 

Whistleblower awards can range from 10 percent to 30 percent of the money collected when the monetary sanctions exceed $1 million. As with this case, whistleblowers can report jointly under the program and share an award.

By law, the SEC protects the confidentiality of whistleblowers and does not disclose information that might directly or indirectly reveal a whistleblower’s identity.

For more information about the whistleblower program and how to report a tip, visit www.sec.gov/whistleblower.

$22 Million Whistleblower Award

$22 Million Whistleblower Award for Company Insider Who Helped Uncover Fraud
FOR IMMEDIATE RELEASE
2016-172
Washington D.C., Aug. 30, 2016 —

The Securities and Exchange Commission today announced the award of more than $22 million to a whistleblower whose detailed tip and extensive assistance helped the agency halt a well-hidden fraud at the company where the whistleblower worked.

The $22 million-plus award is the second-largest total the SEC has awarded a whistleblower. The largest, $30 million, was awarded in 2014.

“Company employees are in unique positions behind-the-scenes to unravel complex or deeply buried wrongdoing. Without this whistleblower’s courage, information, and assistance, it would have been extremely difficult for law enforcement to discover this securities fraud on its own,”

— said Jane Norberg, Acting Chief of the SEC’s Office of the Whistleblower

The SEC’s whistleblower program, which has been rewarding valuable information from tipsters since its inception in 2011, has now surpassed $100 million in total money awarded. More than $107 million has been awarded to 33 whistleblowers who became eligible for an award by voluntarily providing the SEC with original and useful information that led to a successful enforcement action. Whistleblower awards can range from 10 percent to 30 percent of the money collected when the monetary sanctions exceed $1 million. All payments are made out of an investor protection fund established by Congress that is financed through monetary sanctions paid to the SEC by securities law violators. No money has been taken or withheld from harmed investors to pay whistleblower awards.

By law, the SEC protects the confidentiality of whistleblowers and does not disclose information that might directly or indirectly reveal a whistleblower’s identity.

For more information about the whistleblower program and how to report a tip: www.sec.gov/whistleblower.

Disclosures of Return Information in the IRS Whistleblower Program

On February 2, 2010, Deborah A. Butler, Associate Chief Counsel, provided legal advice in PMTA 2011-31, advising the employees of the IRS Whistleblower Office that they are authorized to disclose [taxpayer] return information in making tax reward payment determinations pursuant to Section 7623 or providing status updates to IRS whistleblowers regarding pending, unprocessed, or dismissed claims under Section 7623.

 However, the office stressed, the specific taxpayer return information that may be disclosed to an IRS whistleblower in a particular instance will depend on the facts and circumstances of the matter.  In the legal opinion, Ms. Butler stated,

"Neither section 7623 nor any other Code section specifically authorizes the disclosure of taxpayer return information in the course of the whistleblower award review and determination process.  Nonetheless…Congress presumably did not intend to create an irreconcilable conflict between the IRS Whistleblower Office’s non-disclosure obligations and its obligation to convey appealable determinations to whistleblowers."

The legal opinion from the IRS Office of Chief Counsel concluded that IRC § 6103(h)(4), which authorizes disclosures of such information in judicial and administrative proceedings, authorizes the IRS Whistleblower Office disclosures, as the whistleblower award review and determination process would be considered an administrative proceeding.

PMTA 2011-31 was dated Feb. 1, 2010.

Despite the above legal opinion from the Office of Chief Counsel, we note that in the nearly two years that has passed since the advice was given; the IRS Whistleblower Office is reluctant to provide status updates as to the open whistleblower cases.  It is important that the whistleblower engage a knowledgeable and experienced tax whistleblower attorney to assist them.