Multiple whistleblowers appear the norm these days in securities lawsuits, if the two most recent award determinations are any indication of the success of the Dodd-Frank whistleblower program. Yesterday, the Securities & Exchange Commission released a reward determination authorizing payment of $1.8 million to one individual and $130,000 to be split between two other whistleblowers.
The larger award went to the first whistleblower. The order providing for the award determination indicated that the staff opened the investigation following the initial tip from this individual and he/she met with the staff to provide useful information on several occasions.
The second and third whistleblowers earned $130,000 total for the information submitted approximately 18 months later and, according to the determination, played a lesser role than the original informant. The press release made clear that they provided the information after the investigation started. The order gave the individuals just over a week to report if they would like a different split then 50/50.
The two later whistleblowers challenged the preliminary determination of award amount but did not receive an increase.
The fourth whistleblower in this case was denied. The SEC previously determined that the individual had knowingly and willfully made false or fraudulent statements over several years and barred eligibility for a reward in pending or future actions.
As usual, the SEC said little about the individuals or the enforcement action. The SEC has now paid more than $57 million to 26 whistleblowers.
It seems like there has been an uptick in cases involving multiple whistleblowers based on the recent past. In the January award, four whistleblowers submitted claims for payment although only one received a reward for information (totaling more than $700,000). It will be interesting to see if this trend continues (a great sign the program is working), or if it is just a short term trend stemming from the backlog of cases with difficult issues to resolve.
To speak to our SEC whistleblower lawyers about this information or for an evaluation of a potential submission to the SEC, please call 1-800-590-4116.