FY 2021 Promises Even Higher SEC Whistleblower Awards Than Record-Breaking FY 2020

FY 2021 has proven to be an even more active year than FY 2020 for whistleblower awards from the Securities and Exchange Commission. With more than three months still left in FY 2021, the Commission’s Office of the Whistleblower already has awarded approximately $370 million to whistleblowers, setting up the year to surpass FY 2020 for an all-time high.

The SEC also is taking a liberal stance when it comes to interpreting provisions of the federal securities laws in a manner that appears to be designed to encourage whistleblowers to come forward. For example, in one action, the SEC exercised its discretionary authority to waive a procedural defect, and in another, the SEC awarded a significant sum for a tip with a more tenuous nexus to the action.

In FY 2020, the SEC also received a record number of whistleblower tips. Credible whistleblower tips may serve as an increasing impetus to the opening of investigations by both the SEC and other regulators—and, given the start to FY 2021, the trend is likely to continue (if not strengthen) under the new administration.

To learn more about these developments and some practical considerations, read our Advisory here.

© Arnold & Porter Kaye Scholer LLP 2021 All Rights Reserved. This blog post is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.