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Record-Setting $114 Million Whistleblower Award Will Incentivize More Leaks to Law Enforcement

By: Fry Wernick, Casey Downing and Paul Brzyski

On October 22, 2020, the Securities and Exchange Commission (the “SEC” or “Commission”) announced a $114 million whistleblower award—by far the largest amount ever awarded and more than doubling the previous record of nearly $50 million.[1]

The massive payout will continue to raise the profile of the SEC whistleblower program, which has awarded close to $700 million to whistleblowers since it was created by the Dodd-Frank Act in 2010.[2] More importantly, the lucrative award creates a powerful incentive to company employees to leak documents and alert government authorities to potential evidence of wrongdoing, and serves as a powerful reminder to companies to build and maintain strong corporate compliance programs.


The SEC’s award program allows whistleblowers who voluntarily provide original information that leads to a successful enforcement action and results in more than $1 million in monetary sanctions to receive between 10 and 30 percent of the amount collected.[3] When calculating the size of the award, the SEC considers a number of factors, including the nature of the information provided, the extent of the whistleblower’s cooperation, the timeliness of the reporting, and the whistleblower’s compliance with the company’s internal reporting system.[4] 

The award comes just one month after the SEC raised fears among whistleblower advocates that it was aiming to curb the size of awards, especially larger ones. We previously reported about the Commission’s September 23, 2020, 3-2 vote to issue a final rule clarifying its “broad discretion in applying the Award Factors and setting the Award Amount, including the discretion to consider and apply the Award Factors in percentage terms, dollar terms or some combination thereof.”[5] The rule came on the heels of a proposed rule—ultimately rejected in favor of the version adopted by the Commission on September 23—which included a provision allowing the Commission to exercise discretion to reduce “exceedingly large” awards in cases where the whistleblower provided information that resulted in at least $100 million in monetary sanctions and $30 million in award.[6] While the $114 million award’s value as a percentage of monetary sanction remains unknown, the sheer dollar amount should help rebut criticism that the SEC is reducing incentives for whistleblowers to come forward.

What this Means for You

The SEC’s hefty award serves as a healthy reminder to company employees and management of the incredible incentives that exist for employees to share incriminating information with law enforcement, thus raising additional incentives for companies to build and empower compliance programs to prevent, detect, and investigate potential misconduct within their companies. In determining the size of a whistleblower award, SEC Regulation 21F-6 contemplates higher awards for whistleblowers who first attempt to report their concerns internally, and also for those who suffer hardship as a result of reporting.[7] Consequently, when a whistleblower raises a valid compliance concern within his or her company and that concern is ignored or rebuffed, or if the company retaliates against the whistleblower for raising such concerns, the opportunity for a large payout by the SEC is optimized. Jane Norberg, Chief of the SEC’s Office of the Whistleblower, emphasized this aspect of award calculation when she announced the recent $114 million award: “[a]fter repeatedly reporting concerns internally, and despite personal and professional hardships, the whistleblower alerted the SEC and the other agency of the wrongdoing and provided substantial, ongoing assistance that proved critical to the success of the actions.”[8] 

Given the growing impact of the SEC’s whistleblower program, it is now more important than ever for companies, especially publicly-traded companies regulated by the SEC, to build robust compliance programs and make every effort to investigate internal complaints about corruption, fraud, or other forms of misconduct. It is similarly vital that companies enact and enforce non-retaliation policies that encourage reporting and protect employees when they make a valid claim. As this record-breaking award demonstrates, massive incentives exist for such wrongdoing to come to light and inaction can be costly. As always, companies are well-served to consult with experienced and competent counsel to help when these needs arise.

[1] Press Release, SEC Issues Record $114 Million Whistleblower Award, Sec. & Exch. Comm’n (Oct. 22, 2020) [SEC Press Release],

[2] Id.

[3] See 15 U.S.C. § 78u-6.

[4] See 17 C.F.R. § 240.21F-6.

[5] Sec. & Exch. Comm’n, Final Rule Release No. 34-89963, Whistleblower Program Rules (Sept. 23, 2020)(17 C.F.R. pts. 240 & 249),

[6] See Whistleblower Program Rules, 83 Fed. Reg. 34,702 (proposed June 29, 2018)(to be codified at 17 C.F.R. pts. 240 & 249), available at

[7] See 17 C.F.R. §§ 240.21F-6(a)(2)(vi) and (a)(4).

[8] See SEC Press Release.

This information is provided by Vinson & Elkins LLP for educational and informational purposes only and is not intended, nor should it be construed, as legal advice.