Despite a subsequent falling out between a pair of tipsters over possible financial rewards, the U.S. Securities and Exchange Commission (SEC) is jointly awarding US$27 million to the couple of whistleblowers.
The SEC announced on Monday four whistleblower awards totalling US$31.5 million, including a joint award to two whistleblowers who initially reported to the regulator as a team but later sought separate awards.
According to the SEC’s order, the pair initially contacted the SEC together, met jointly with enforcement investigators, and were initially represented by the same lawyer.
However, one of the tipsters later hired their own lawyer and filed their own application for a whistleblower award, leading the other to argue that they should be treated separately and considered for individual awards rather than a joint payout.
The commission rejected that argument, ruling, “Whatever [their] private understanding may have been, and regardless of their apparent subsequent falling out, the record is clear that they presented themselves to the commission as joint whistleblowers ….”
The SEC said the pair presented themselves to investigators as a “team,” and that their information was not provided separately.
As a result, the commission ordered a joint award of almost US$27 million to the duo.
In a second order, the SEC awarded another US$4.5 million to two whistleblowers.
One tipster, who was initially denied an award, had that decision overturned after presenting new evidence which showed they provided information that aided the investigation prior to being contacted by regulators. As a result, they received approximately US$3.75 million.
The other tipster in the case received approximately US$750,000.
“While both whistleblowers independently provided information that assisted SEC staff in an ongoing investigation, the whistleblower who received the larger award provided information and assistance that was more important to the resolution of the overall case,” the commission said in a release.
The SEC has now awarded approximately US$873 million to 162 individuals since issuing its first award in 2012.
“Whistleblowers play a critical role in an investigation, whether at the outset or during the course of an investigation,” said Emily Pasquinelli, acting chief of the SEC’s Office of the Whistleblower.
“Today’s awards demonstrate that whistleblowers with specific, credible information who significantly contribute to the success of an existing investigation may be eligible for an award,” she said.