SEC whistleblower award for $37M goes to Phillips & Cohen’s international clients

WASHINGTON, DC, Feb. 4, 2022 – The US Securities and Exchange Commission’s recent $37 million whistleblower award was issued to two individuals who filed a joint whistleblower submission to the SEC and were represented by Phillips & Cohen LLP.

The reward that Phillips & Cohen’s clients received, announced by the SEC on Jan. 21, is tied for the seventh largest SEC whistleblower award ever.

It also likely is the largest SEC award made to international whistleblowers so far. Phillips & Cohen represented a whistleblower based overseas who received an SEC whistleblower reward of more than $32 million, which was the previous biggest SEC whistleblower award to an international whistleblower.

“The SEC was unaware of the wrongdoing until my clients stepped forward,” said Erika A. Kelton, a whistleblower attorney and partner at Phillips & Cohen. “Despite the risk to their careers, they provided information and assistance that were instrumental in the SEC’s enforcement action.”

The SEC whistleblower award was based on monetary sanctions by the SEC and another government agency, which the SEC did not name in its order for the whistleblower reward. SEC whistleblowers are entitled to a reward based on related enforcement actions by certain other government agencies if those related actions are due to the same information the whistleblower provided to the SEC.

The SEC is required by law to keep a whistleblower’s identity confidential, with certain limited exceptions. When announcing whistleblower awards, the SEC provides only the reward amount to avoid providing any information that might help identify the whistleblower.

Phillips & Cohen’s clients, who have chosen to remain anonymous, said they are pleased with the outcome of the case.

“We found it heartening that the SEC listened to us and quickly began to investigate,” said the whistleblowers in a joint statement. “We greatly appreciate the SEC’s work on the case.”

Kelton said the existence of the SEC whistleblower program made a big difference in her clients’ decision to report the wrongdoing.

“Without the protections and the financial incentives that the SEC whistleblower program offers, it would have been a much harder decision for them to come forward,” Kelton said.

The SEC whistleblower program – confidentiality, protections and rewards

The SEC whistleblower program, created by the Dodd-Frank Act, provides confidentiality, certain protections against job retaliation, and rewards in cases where monetary sanctions exceed $1 million. Whistleblower rewards range from 10% to 30% of the amount the government collects, based on certain factors, such as the significance of the whistleblower’s information and the level of assistance the whistleblower and their attorney provide in the case.

The SEC has ordered monetary sanctions totaling nearly $5 billion in enforcement actions due to whistleblowers’ information and assistance since Congress created the SEC whistleblower program as part of the Dodd-Frank Act in 2010. The agency has issued whistleblower awards totaling approximately $1.2 billion to 245 individuals during that time.

About Phillips & Cohen LLP

Phillips & Cohen represents whistleblowers in SEC whistleblower claims as well as qui tam lawsuits and the whistleblower reward programs of the Commodity Futures Trading Commission and the Internal Revenue Service. Its roster includes the founding Chief of the SEC Office of the Whistleblower as well as former government prosecutors and attorneys with decades of experience representing whistleblowers.

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