SEC Whistleblower Awards: How Bounties Are Calculated.

Last Updated on: 4th August 2026, 01:33 am

If you have served as an SEC whistleblower, you are eligible to receive an award equal to 10% to 30% of the monetary sanctions collected in a successful covered action. However, becoming eligible for an award is not the same as receiving an award.

In order to become eligible for an award, you must contribute to a successful covered action that results in the imposition of monetary sanctions of more than $1 million.

Eligibility is based on the monetary sanctions ordered in the covered action. If the defendant is ordered to pay $5 million in sanctions, and you contributed to this order, you are eligible to receive an SEC whistleblower award regardless of whether any money is ever collected. However, your award, if the SEC awards one, will be based on the amount that is actually collected. For example, even if you are eligible for an award in a $10 million judgment, you will receive $0 if the defendant pays nothing.

There is no statutory average SEC whistleblower award. To calculate the average award, one would need the total amount of all awards and a count of all successful claimants.

The SEC whistleblower award program is governed by the federal securities laws of the United States. Specifically, the Securities Exchange Act of 1934, 15 U.S.C. 78ff(a)(21), also known as Exchange Act Section 21F.

The SEC announces awards separately from the underlying enforcement action. The SEC never announces the names of award recipients, because the Dodd-Frank Act requires it to protect whistleblower confidentiality and to withhold any information that could reveal a whistleblower's identity. With its May 5, 2023, SEC Whistleblower Award announcement, the SEC awarded a record-setting $279 million to a whistleblower. The recipient did not prompt the opening of the investigation, but provided information that expanded an existing one and also assisted two actions brought by another agency; the SEC's order was redacted and did not identify the companies involved or the nature of the misconduct. Previously, the highest SEC whistleblower award was $114 million, announced in October 2020.

What must I prove to qualify for an SEC award?

To qualify for an SEC award, you must demonstrate that you voluntarily provided original information that was derived from your independent knowledge or analysis and was not known to the SEC from another source, unless you were the original source.

However, this does not mean you must independently uncover new information. You may receive an SEC award for information that you possess but that is not in the SEC’s possession. If you have information that could substantially advance an existing SEC investigation, you may qualify for an SEC whistleblower award.

What happens if I provide information that the SEC requested?

As previously discussed, to qualify for an SEC award, you must provide information on a voluntary basis. If you provide information that the SEC specifically requested, it will not be considered voluntary, and you will not qualify for an award.

What are the penalties for failing to disclose all relevant information in my SEC whistleblower award application?

If you qualify for an SEC award, you must fully disclose all relevant information you have to the SEC. This is required under Rule 21F-8(b). Failing to fully disclose information can lead to penalties for falsifying records and obstructing justice. It can also lead to the denial of an award.

What is the burden of proof for an SEC whistleblower award claim?

The burden of proof for an SEC whistleblower award claim lies with the whistleblower, who must establish eligibility under Rule 21F-8. SEC whistleblowers do not have to pursue a private lawsuit to receive an award. Instead, they must satisfy the administrative requirements that determine their eligibility for an award.

Do I need to have witnessed the securities violations in order to qualify for an award?

No. You do not need to have personally witnessed a securities violation in order to receive an SEC award. But you must provide original information derived from your independent knowledge or analysis; mere possession of information is not enough.

What if I previously cooperated with the government in exchange for a prearranged award?

Generally, whistleblowers are not eligible for an award if they provide information as part of a preexisting agreement with the government. However, if the information you provide goes beyond what you previously provided, you may still qualify for an SEC whistleblower award.

Do I have to prosecute the case in order to receive an SEC whistleblower award?

No. You will not prosecute the SEC’s enforcement action as part of your SEC whistleblower award application. Rather, the SEC will pursue the case, and your award will depend on the case’s outcome.

Why would the SEC choose 10% instead of 30%?

The federal securities laws give the SEC broad authority to decide how much an SEC whistleblower should receive from a successful enforcement action. The SEC must select a percentage between 10% and 30% based on a number of factors.

What increases the percentage of an award?

While the SEC has broad discretion when deciding how much to award an SEC whistleblower, there are four factors that increase the percentage, the fourth being the law enforcement interest in granting the award:

• The significance of the information provided.
• The extent of the assistance provided to the SEC.
• The use of the whistleblower’s internal compliance systems.
• Law enforcement interest in making awards to whistleblowers who provide information that leads to successful enforcement.

What decreases the percentage of an award?

There are also three factors that decrease the award percentage. If these factors apply to you, you may receive a smaller SEC whistleblower award, but these factors alone do not make you ineligible for an award:

• The culpability of the whistleblower in the securities violations.
• The timing of the report and the information’s age.
• Interference with the employer’s or client’s internal compliance systems.

How does the SEC calculate awards of $5 million or less?

While the SEC has wide discretion over the awarding percentage, it generally starts with 30% for awards of $5 million or less. It will only adjust the amount downward if you are culpable or if other factors warrant a smaller award.

To what extent does the SEC calculate the award based on law enforcement interests?

Law enforcement interests are explicitly enumerated in the federal securities laws at 15 U.S.C. § 78u-6(c)(1)(B)(i)(III) and Rule 21F-6(a)(3), and they play a role in the calculation of the whistleblower’s award. This include the potential to deter future violations, the necessity of the whistleblower’s information for prosecution, and the extent to which the whistleblower is otherwise needed for future prosecutions.

What are the criteria for culpability?

When determining whether the award percentage is 10% or 30%, culpability is a key factor. When assessing culpability, the SEC will consider:

• Whether the whistleblower personally participated in the securities violation.
• The whistleblower’s role in the violation.
• Whether the violation was intentional.
• Whether the violation was part of a pattern of repeat conduct.
• Whether the violation caused significant economic harm to others.
• Whether the whistleblower personally benefitted from the violation.
• Whether the whistleblower engaged in any form of obstruction or attempt to impede the SEC’s investigation.

Are there protections for whistleblowers who are culpable?

Even though the SEC has wide discretion when deciding how much it will award to an SEC whistleblower, if you qualify for an SEC award, federal law may protect you from retaliation for coming forward. Culpability alone is not enough to deny an award or even to deduct it. All that culpability does is open the door for the SEC to potentially reduce your award.

If you are facing this situation, Spodek Law Group handles federal criminal defense matters nationwide, from offices in New York and Los Angeles.

How do collections, taxes, and fees affect my final payment?

You are not entitled to a fixed dollar award. Instead, your award amount depends on the amount of sanctions collected from the defendant. Qualifying monetary sanctions can range from small amounts to amounts exceeding $100 million. However, if sanctions payable by you (the whistleblower) were collected, those sanctions will not count toward the $1 million minimum threshold for award eligibility, nor will they count toward the calculation of the award percentage.

From where are whistleblower awards paid?

Whistleblower awards are not paid out of the monetary sanctions collected from defendants. Instead, they are paid from the SEC’s Investor Protection Fund. This means that you do not need to worry about your award reducing the amount that harmed investors recover.

What if the defendant only collects in installments?

Rule 21F-14(b) provides the primary answer to the question of what happens if the defendant pays only in installments. The rule provides that “[a] recipient of a whistleblower award is entitled to payment on the award only to the extent that a monetary sanction is collected in the Commission action or in a related action.” This means that the whistleblower receives an amount equal to his or her award percentage multiplied by the amount collected at any given time.

What is a “maximum” award?

There is no single maximum amount for an SEC whistleblower award. Instead, a “maximum” award equals the award percentage multiplied by the monetary sanctions collected from the defendant. If the defendant is ordered to pay $10 million, and your award percentage is 20%, you are entitled to a maximum award of $2 million, if all $10 million is collected.

What is an SEC whistleblower award in real-world terms?

To put this into real-world terms, assume that you are awarded 20% of a $5 million judgment. In this case, $5 million is the amount ordered, but the amount collected is $2 million. Your award will be based on the amount collected, which equals 20% of $2 million, or $400,000.

Are SEC whistleblower awards taxable?

In general, SEC whistleblower awards are included in federal gross income under Internal Revenue Code Section 61. With that said, many whistleblowers will receive a refund of some or all of their federal income tax liability due to the protections of Internal Revenue Code Section 62(a)(21), which allows for deductions of attorney fees connected to the award of an SEC whistleblower.

What is Internal Revenue Code Section 62(a)(21)?

Internal Revenue Code Section 62(a)(21) provides a specific deduction for the attorney fees associated with obtaining an SEC whistleblower award under Exchange Act Section 21F. With that said, a whistleblower cannot use this deduction to reduce their taxable income more than the amount they received as an award. For example, if you received an award of $100,000, but your attorney fees were $150,000, you will still be able to claim a deduction of $100,000, but you will not be able to deduct the remaining $50,000 of your attorney fees.

Can I deduct my attorney fees?

Yes, and your attorney fees are deductible under Internal Revenue Code Section 62(a)(21) to the extent to which the award was included in your gross income. The fact that you do not have to personally fund your case also protects you; as your whistleblower attorney will be paying all out-of-pocket expenses up front.

What happens when multiple whistleblowers or other agencies recover money?

What happens when other agencies recover money?

If you served as an SEC whistleblower, and another agency pursues a successful action against a company or individual based on your information, you may still be eligible for an SEC award. The SEC’s Rule 21F-3(b) recognizes that a successful enforcement action brought by another authority, based on the same original information the whistleblower gave the SEC, can qualify as a related action. If the SEC does take a related action that results in the collection of more than $1 million, you may be entitled to a related-action award based on the amount of monetary sanctions collected in the related action.

What happens when there are multiple whistleblowers?

If there are multiple whistleblowers to a case, and the combined monetary sanctions collected exceed $1 million, there may be a combined award from the SEC. Rule 21F-5(c) provides that “if multiple whistleblowers are awarded, the sum of their award percentages cannot exceed 30%.” Each whistleblower’s percentage is determined by the SEC on an individual basis. If multiple whistleblowers receive awards, it does not necessarily mean that multiple award determinations were made; instead, it may mean that a single award determinationcompensated multiple whistleblowers.

Are multiple award determinations and multiple award recipients the same?

In order to determine the average SEC whistleblower award, it is necessary to know the total amount of awards and the count of award determinations. Because a single award determination can compensate multiple SEC whistleblowers, the count of award determinations will generally be lower than the number of award recipients.

What happens when a whistleblower’s role extends beyond the SEC?

If a whistleblower’s role extends beyond the SEC, the whistleblower may be entitled to receive multiple awards. With that said, this could apply even if the information provided to the other government agencies is substantially the same as the information provided to the SEC.

Which government agencies created the whistleblower award programs in Dodd-Frank?

Although the SEC and CFTC are the two primary agencies that administer whistleblower award claims under Dodd-Frank, the two agencies did not create the programs. Rather, Congress created both programs in the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act.

Contact a Federal Criminal Defense Attorney

Nothing here is legal advice, and the details of your case matter. Todd Spodek and Spodek Law Group take federal criminal and white collar cases nationwide, from offices in New York, Brooklyn, Queens and Los Angeles. You can reach the firm at 212-300-5196.