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How Often Does The SEC Obtain Judgments For Over $1 Million?

An eligible whistleblower can apply for a monetary award from the Securities and Exchange Commission (SEC) if the information provided by the whistleblower has enabled the SEC to obtain a judgment for more than $ 1 million. As a result, the number of opportunities for whistleblower recoveries depends in part on how often the SEC is successful in securing judgments for over $ 1 million. Potential whistleblowers can reasonably ask: How often does that actually happen?

The SEC actively promotes its whistleblower awards program and issues a public statement whenever a monetary award is made. Very large awards in multi-million-dollar cases (for example, $50 million to two whistleblowers jointly, and $33 million to a third whistleblower, in one 2018 case) have understandably attracted most of the attention. But focusing on a few large cases ignores many other matters in which the $1 million baseline has been met and thus were, or still are, potential vehicles for whistleblower awards.

Such "more than $1 million" case resolutions could conceivably be identified through painstaking daily monitoring of SEC press releases. Fortunately, the SEC's Whistleblower Office has made this task easier by publishing a monthly list (the "Notice of Covered Actions") showing the enforcement actions in which the SEC has recently obtained a judgment or order entitling the SEC to recover more than $1 million. The cases on this list constitute the universe of matters in which an eligible whistleblower could seek an award. (An eligible whistleblower must apply for an award within 90 days after a matter is listed on the Notice of Covered Actions.)

The Notice of Covered Actions can be used to determine how often the SEC succeeds in obtaining a judgment for over $1 million. Our analysis indicates that during the five years from 2014 through 2018, the SEC obtained an average of 160 such judgments each year. The number of such judgments in 2017 and 2018 was similar to the five-year average, i.e., approximately 175 judgments in 2017 and 162 judgments in 2018. These figures reveal that the SEC has been highly successful, over an extended period, in pursuing claims for disgorgement and civil penalties in excess of $1 million, thus creating numerous opportunities for whistleblower awards. We believe these figures should encourage potential whistleblowers to report securities law violations to the SEC, through counsel and in the manner prescribed by the SEC, with the expectation that the information provided will be used by the SEC to pursue significant monetary recoveries.

Whistleblower Aid's experienced legal team can help you confidentially report securities violations and, when appropriate, can prepare a persuasive application on your behalf for a significant monetary award. If you think you have witnessed securities law violations, reach out to us securely here.

Whistleblower Aid

The foregoing is provided by Whistleblower Aid (WBA) for general information purposes and is not intended to be, and should not be, taken as legal advice. See https://whistlebloweraid.org/contact/#whistleblower-contact for guidance on how to contact WBA.