Whistleblower double dips on enforcement tip

By James Langton | October 29, 2021 | Last updated on October 29, 2021
1 min read

A U.S. whistleblower has cashed in a second time, receiving an additional US$2-million payout from the U.S. Securities and Exchange Commission (SEC) under new rules on payouts for enforcement actions by other federal agencies.

The SEC paid more than US$2 million to a tipster, who had previously received a whistleblower award from the regulator, after the tip also led to successful enforcement action by the U.S. Department of Justice (DoJ). The SEC didn’t disclose the size of the original award.

The second payout was awarded in recognition that the same information also led to a related enforcement case by the DoJ.

The whistleblower was eligible for the second award based on recent amendments to the SEC’s rules that clarified the types of actions that can be considered “related” under the whistleblower rules.

“The SEC’s whistleblower rule amendments make clear that non-prosecution and deferred prosecution agreements entered into by the DOJ are related actions upon which whistleblowers may receive awards,” said Emily Pasquinelli, acting chief of the SEC’s Office of the Whistleblower, in a release.

“Today’s award demonstrates the SEC’s commitment to award whistleblowers not only for their contributions to a successful SEC enforcement action but also for their contributions to qualifying related actions,” she said.

The SEC has now paid approximately US$1.1 billion to 224 tipsters since issuing its first award in 2012.

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James Langton

James is a senior reporter for Advisor.ca and its sister publication, Investment Executive. He has been reporting on regulation, securities law, industry news and more since 1994.