Whistleblower epidemic across America yields $168 million in awards
WASHINGTON, DC – December 08, 2018
In November, the U.S. Securities and Exchange Commission (SEC) released a detailed 2018 Annual Report to Congress, stating that the Commission awarded more money in FY 2018 to meritorious whistleblowers than in all prior years combined. The Commission also received more whistleblower tips in FY 2018 than in any other previous year, the report said.
“While the dollars awarded and volume of tips received are reflections of the program’s success, we are most proud of the program’s added value in the protection of the Main Street investor,” underlined Jane Norberg, Chief of the SEC’s Office of the Whistleblower (OWB).
The report also indicates that the SEC Whistleblower Program is growing and gaining momentum. In fiscal year 2018, the SEC received 5,282 tips in fiscal 2018, an increase of approximately 67% since fiscal year 2012, which is the greatest number of tips the SEC Whistleblower Program has received in its history. Since 2011, the office has received nearly 28,000 tips.
The Commission has awarded over $326 million to 59 individuals since the beginning of the whistleblower program. In FY 2018 alone, the SEC awarded more than $168 million in whistleblower awards to 13 individuals whose information and cooperation assisted the Commission in bringing successful enforcement actions, which included the three largest awards to date: a $50 million award, a $39 million award and a $33 million award.
Thus, on March 19, 2018, the Commission announced two of its largest-ever whistleblower awards, with two individuals sharing a nearly $50 million joint award and another whistleblower receiving more than $33 million. The first two individuals jointly provided significant information that prompted the Commission to open the first of two investigations and ongoing assistance that saved the Commission a substantial amount of time and resources. The third individual supplied the Commission with additional information that initiated and acted as the cornerstone of the Commission’s second investigation resulting in the Covered Action.
This reflects a significant increase in awards compared to fiscal year 2017 ($50 million in awards) and fiscal year 2016 ($57 million in awards).
Consistent with previous years, the most common whistleblower tips related to offering fraud (20%), corporate disclosures and financials (19%) and manipulation (12%). Other notable areas of tips related to insider trading, foreign bribery and other FCPA violations, and unregistered offerings.
Consistent with fiscal 2017, individuals in California, New York, Texas, Florida, and New Jersey submitted the largest number of tips in fiscal 2018. Since the beginning of the whistleblower program, the Commission has received whistleblower tips from individuals in 119 countries outside the United States. In FY 2018 alone, the Commission received whistleblower submissions from individuals in 72 foreign countries. After the United States, OWB received the highest number of whistleblower tips this past fiscal year from individuals in Canada, the United Kingdom, and Australia.