The SEC is required to pay whistleblowers 10-30% of any monetary sanctions collected as a result of their information that lead to successful SEC enforcement action where the sanction are more than $1 million. The whistleblower may also be eligible for additional financial awards if other sanction are put into place from other organizations. It is illegal under the same act for employers to act negatively against the whistleblower who has the options of remaining anonymous if they are represented by a SEC Whistleblower lawyer.
As a response to this legislation, Labaton Sucharow, was the first law firm to exclusively protect and advocate for the SEC whistleblowers. The practice is led by Jordan A. Thomas who used to be an Assistant Director and Assistant Chief Litigation Counsel in the Division of Enforcement at the SEC. Thomas played a leading role in creating this whistleblower program and proposing the legislation and finally implementing the rules.
On June 9th, 2016, the SEC reported that they has paid out its second highest whistleblower award of $17 million since the program was created five years ago. The highest was a $30 million award given in September 2014 and a $14 million award was given in October 2013. There has been a total of 32 tipsters since the beginning of this program and between all of them, they have been awarded $85 million.
This most recent award was given to a former employee, who was represented by Jordan Thomas and his law firm, of a “major player in the financial-services industry.” The name of the company was not given, nor was the whistleblower named. This person, however, enabled the SEC to conserve both time and resources in collecting strong evidence against the unnamed company. Since whistleblowers are paid at least 10% of the collected money, the $17 million award shows there was a substantial amount of money collected because of his/her information.