The Securities and Exchange Commission (SEC) announced that during fiscal year 2022 they awarded 103 awards a total of $229 million.  Since 2012 the program has awarded $1.3 billion to 328 whistleblowers. The SEC reported the over one billion dollars in awards are a result of $6.3 billion in monetary sanctions. 

Largest SEC Whistleblower Awards in 2022 

The 5 largest awards in fiscal year 2022 were for $40 million to two whistleblowers ($32m and $8m), $37 million to two whistleblowers, $17 million to one whistleblower, $16 million to two whistleblowers ($13/$3 million), and $15 million to two whistleblowers ($12.5/$2.5 million). 

Adding up the top 5 awards, and they represent $125 million of the total $229 million awarded, or just over half.  The SEC implemented Whistleblower Rule Amendments in December 2020 that created a new presumption those eligible for an award should receive the maximum 30% when the award would not exceed $5 million.  The SEC reported that during fiscal year 2020, over 90% of the awards were able to use this new maximum percentage rule.  For other awards, Rules 21F-6(a) and (b) are used to determine the amount to be awarded. 

SEC Whistleblower Office Fiscal Year 2023 

The government uses a fiscal year that differs by three months from the calendar year. A calendar year runs January to January, but the government fiscal year starts October 1st the year before, and runs through the end of September of the calendar year.  Fiscal year 2023 for the SEC will be October 1st, 2022, through September 30th, 2023. 

Despite being only three months into the fiscal year, the SEC has already awarded many major new awards: 

• October 31st, 2022:  SEC announced an award of over $10 million to one whistleblower. 
• November 28th, 2022: SEC announced an award of $20 million to one whistleblower. 
• December 12th, 2022: SEC announced an award of over $20 million to one whistleblower. 
• December 19th, 2022: SEC announced an award of over $37 million to one whistleblower. 

SEC Whistleblower Tips 

Tip reporting to the SEC has increased yearly since 2012, with large increases in tip received since 2020. The SEC reported that the largest category of tips were regarding market manipulation, followed by fraud, ICO or initial coin offerings, cryptocurrency activity, and finally tips regarding impropriety around corporate disclosures and corporate financials. 

Smaller categories of tips included, in order of tips: insider trading, trading and pricing, unregistered offerings, FCPA, market events, and tips regarding improper actions with municipal securities and public pensions. 

Reporting A Tip to the SEC 

The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act) created a new set of whistleblower protection and reward programs, including for reporting financial irregularity to the Security and Exchange Commission (SEC). 

The SEC Whistleblower Reward Program can award individuals who report fraud and misconduct involving security law violations within the United States. The reporting individual need not be in the United States nor a citizen.  Anyone, either here or abroad, can report wrongdoing and violations of U.S. security laws. 

The SEC will investigate any tip received. If a case is filed the whistleblower can submit a claim. The SEC will review claims and offer a preliminary determination. After reconsideration requests, the SEC will issue a final order or award.  An attorney can assist those reporting with the process. 

Individuals who report wrongdoing can choose to remain anonymous. Neither the SEC nor their attorneys will reveal their identify. Whistleblowers who wish to remain anonymous will need an attorney to present the tip on their behalf. To speak with the attorneys at Schneider Wallace, contact us at 1-800-689-0024 or info@schneiderwallace.com to set up a meeting time.  A private legal consultation is at no cost. 

Additional Links:

• SEC Whistleblower Program 
• SEC Whistleblower Program Frequently Asked Questions 
• SEC Whistleblower Awards