SEC says it awarded $229 million to whistleblowers in 2022 fiscal year
The U.S. Securities and Exchange Commission says its 2022 fiscal year was the second-highest year ever for awards to whistleblowers.
The agency, which oversees Wall Street and financial markets, said November 15, 2022 that its Office of the Whistleblower issued approximately $229 million in 103 awards during the fiscal year, which ended on Sept. 30, 2022.
The Whistleblower Program also received a record high number of whistleblower tips alleging wrongdoing — more than 12,300 whistleblower tips — in fiscal year 2022.
The SEC noted in an announcement that its whistleblower program is an “integral” part of its enforcement program. The agency said it vigorously safeguards whistleblowers’ anonymity, and also protects them by pursuing individuals or entities who take steps to impede, or retaliate against them for, their whistleblowing.
“This was reflected in enforcement actions against the Brink’s Company, which the SEC charged and penalized for requiring certain employees to sign restrictive confidentiality agreements, and against the co-founder of a technology company, whom the SEC charged with impeding an employee from communicating with the SEC regarding potential misconduct,” the agency said.
In the Brink’s case, the company settled charges that it improperly required employees to sign restrictive confidentiality agreements prohibiting the disclosure of any financial or business information to third parties, without an exemption for potential SEC whistleblowers, from at least 2015 through 2019. According to the SEC's order, the confidentiality agreement threatened current and former employees with liquidated damages and legal fees if they failed to notify the company prior to disclosing any financial or business information to third parties. According to the order, the confidentiality agreement did not provide an exemption for potential SEC whistleblowers.
Overall in fiscal year 2022, the SEC said it filed 760 total enforcement actions, a 9 percent increase over the prior year. These included 462 new, or "stand alone," enforcement actions, a 6.5 percent increase over fiscal year 2021; 129 actions against issuers who were allegedly delinquent in making required filings with the SEC; and 169 "follow-on" administrative proceedings seeking to bar or suspend individuals from certain functions in the securities markets based on criminal convictions, civil injunctions, or other orders. The SEC’s stand-alone enforcement actions in fiscal year 2022 ran the gamut of conduct, from "first-of-their-kind" actions to cases charging traditional securities law violations.
“As reflected in these results, the Enforcement Division is working with a sense of urgency to protect investors, hold wrongdoers accountable and deter future misconduct in our financial markets,” said Gurbir S. Grewal, Director of the Division of Enforcement, in a statement. “A centerpiece of those efforts is ensuring that we are using every tool in our toolkit, including penalties that have a deterrent effect and are viewed as more than the cost of doing business.”
The SEC’s fiscal 2022 whistleblower results followed the previous year’s (fiscal 2021) record-breaking results, when the SEC’s whistleblower program awarded $564 million to 108 whistleblowers. The whistleblower program also surpassed $1 billion in awards over the life of the program.
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Related links: https://www.sec.gov/news/press-release/2022-206 ; https://www.sec.gov/news/press-release/2021-238
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