Whistleblower awarded $14 million for exposing fraud

Apr 6

A whistleblower who exposed an ongoing fraud has been awarded about $14 million, the U.S. Securities and Exchange Commission said on March 11, 2022.

The whistleblower, who was not publicly identified by the Securities and Exchange Commission, published an online report exposing an ongoing fraud. Days later the whistleblower shared the same information with the SEC and was persistent in reaching out to the staff.

This prompted the opening of an investigation which resulted in a successful enforcement action and the return of millions of dollars to harmed investors, the SEC said.

As set forth in the Dodd-Frank Act, the SEC protects the confidentiality of whistleblowers and does not disclose information that could reveal a whistleblower’s identity.

“Whistleblowers can play a critical role in an investigation," said Creola Kelly, chief of the SEC’s Office of the Whistleblower. "Here, the whistleblower posted a research report online outlining the allegations against the company and its officer and also, importantly, took expeditious steps to provide this information to the Commission. This case demonstrates the importance of whistleblowers reporting directly to the SEC so that the agency can promptly investigate allegations of wrongdoing."

The SEC’s huge award to the whistleblower illustrates why potential whistleblowers should contact Ethic Alliance, said Scott Williams, the organization’s CEO.

“The scope of securities fraud is enormous, with the SEC paying out over $500 million in whistleblower rewards in 2021 alone. The courage and specialized knowledge that whistleblowers demonstrate is critical to combating fraud and maintaining trust in our financial markets ” said Williams.

Ethic Alliance is a for-profit corporation and law firm whose purpose is to empower, educate and protect whistleblowers, ensuring they receive the protection they need and the rewards they are entitled to under US law (the US government will typically reward whistleblowers 10%-30% of the amount recovered or sanctioned under various whistleblower laws), generating profits for investors while reducing corruption, fraud, theft, lying and cheating in our society.

Ethic Alliance protects whistleblowers through a secure, encrypted reporting and messaging platform, attaching the strong legal protection of attorney-client privilege from the moment a report is filed, and access to a network of specialty attorneys that have made careers protecting and supporting whistleblowers, and working with the US government to win whistleblower lawsuits.

Contact Ethic Alliance at info@ethicalliance.com

The SEC says it has awarded approximately $1.2 billion to 249 individuals 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, according to the SEC.

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.

Other recent awards by the SEC to whistleblowers include a $1.25 million award announced March 25, 2022; three awards totaling approximately $3 million announced March 18, 2022; and three awards totaling more than $40 million to four whistleblowers announced in January 2022.

Photo by Aditya Vyas on Unsplash

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