Whistleblower Denied a Share of $279 Million Award Sues the SEC

An anonymous whistleblower has asked a federal appeals court to overturn a Securities and Exchange Commission decision denying her a share of a record $279 million bounty award issued last month.

The lawsuit, filed under the alias Jane Doe, said the SEC erred when it awarded the entire sum—more than double the previous record award—to a single, anonymous tipster. The payout comes more than three years after the telecommunications company LM Ericsson agreed to pay the SEC and the Justice Department more than $1 billion to settle bribery allegations.

Ericsson bribed officials to win business in China, Egypt, Vietnam, Djibouti, Indonesia, and Kuwait, the U.S. Attorneys office for the Southern District of New York said in a Dec. 6, 2019 statement.

The whistleblower program, written into the Dodd-Frank financial reform law of 2010, provides for tipsters to receive up to 30% of any money recovered from a successful investigation by the SEC or any related actions by other federal agency. In this case, the DOJ and SEC each collected about $500 million from Ericsson to settle a long-running bribery probe.

The SEC’s final order announcing the award also denied claims by two other whistleblowers who said they were entitled to a share because they contributed to the investigation. Jane Doe’s lawsuit, filed May 31 by attorney Max Maccoby of the Washington Global Law Group, is filed under seal in keeping with program rules. A redacted, public report will be released later.

The whistleblower law allows tipsters to remain anonymous throughout the process. The SEC last month refused to provide the name of the attorney who represented the whistleblower who received the $279 million. Bloomberg Law is appealing that decision.

A Bloomberg Law investigation last year found that the agency awarded at least $420 million to clients of firms that employed three high-ranking former SEC officials, and that the agency operated in secrecy far beyond its legal mandate to protect the identity of whistleblowers.

The May 5 award dwarfs the previous record of $114 million issued to a single informant in 2020. In 2021 another tipster was awarded $110 million.

The case is Jane Doe v. SEC, D.C. Cir., No. 23-01140