SEC awards over $16m to whistleblowers after another successful enforcement action

Rick Steves

The program is 10 years-old and has arguably played a critical role in the Division of Enforcement’s ability to effectively detect wrongdoing, protect investors and the marketplace, and bring violators to justice.

The Securities and Exchange Commission has awarded more than $16 million to two whistleblowers for their information and assistance in a successful enforcement action, the agency announced.

As set forth in the Dodd-Frank Act, the SEC does not disclose information that could reveal a whistleblower’s identity in order to protect the confidentiality of whistleblowers.

According to the statement, the first whistleblower prompted the opening of the investigation and provided information on difficult-to-detect violations, and also identified key witnesses and provided critical information, which helped staff in their investigation. As a result, an award of approximately $13 million was in order.

The second whistleblower was awarded more than $3 million for providing important new information during the course of the investigation.

Creola Kelly, Chief of the SEC’s Office of the Whistleblower, said: “The information and assistance provided by these two whistleblowers in helping to identify complex wrongdoing demonstrates the importance of the whistleblower program to the SEC’s enforcement efforts. These whistleblowers reported critical information that aided the SEC’s investigation and provided extensive, ongoing cooperation that helped stop the wrongdoing and protect the capital markets.”

$1.3 billion in awards in 10 years

The SEC’s Director of Enforcement, Gurbir S. Grewal, has praised whistleblowers on the 10th anniversary of the whistleblower program. The SEC has awarded more than $1.3 billion to 278 individuals ever since its first award in 2012.

The program is 10 years-old and has arguably played a critical role in the Division of Enforcement’s ability to effectively detect wrongdoing, protect investors and the marketplace, and bring violators to justice, he said.

“With the help of these whistleblowers, the SEC brought enforcement actions ordering monetary sanctions of approximately $5 billion. Fiscal year 2021, in particular, was a record-breaking year, with the SEC awarding a total of $564 million to 108 whistleblowers”, said Gurbir S. Grewal, who recognized that blowing the whistle may not come without costs, both personal and professional.

All payments are made out of an investor protection fund established by Congress that is financed entirely through monetary sanctions paid to the SEC by securities law violators. No money has been taken or withheld from harmed investors to pay whistleblower awards, according to the regulator.

Whistleblowers may be eligible for an award when they voluntarily provide the SEC with original, timely, and credible information that leads to a successful enforcement action. Whistleblower awards can range from 10 to 30 percent of the money collected when the monetary sanctions exceed $1 million.

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