SEC awards over $28 million to seven whistleblowers
The U.S. Securities and Exchange Commission (SEC) has awarded more than $28 million to seven whistleblowers whose insider information and assistance led to a successful enforcement action.
The primary whistleblower in the case received the largest share, $13 million, for their early and contribution to the investigation. Four additional tipsters, who also provided valuable early information, shared another $13 million. The sixth and seventh whistleblowers, who came forward with new but more limited information later in the investigation, jointly received $2 million.
According to the SEC, all these whistleblowers contributed to the success of the investigation. Their input not only provided essential leads but also saved the SEC’s enforcement staff considerable time and resources. The early contributions of the primary tipster and the group of four were particularly impactful in the early stages of the investigation.
However, not all submissions led to rewards. Another individual who was considered a potential whistleblower was denied an award. The SEC determined that the information provided by this individual did not contribute to the case. This decision was made based on the fact that the SEC had already been investigating the case for about two and a half years, based on a news report, by the time this person provided information.
“These whistleblowers provided valuable information and substantial assistance that played a critical role in the SEC returning millions of dollars to harmed investors,” said Creola Kelly, Chief of the SEC’s Office of the Whistleblower.
Earlier last month, the Commodity Futures Trading Commission (CFTC) said it awarded a total of $16 million to whistleblowers this year, with the majority of these tips involving cryptocurrency cases.
CFTC commissioner Kristin Johnson called on whistleblowers within the crypto industry to step forward, saying they previously received millions of dollars for their help. She also marked the importance of whistleblowers in enforcement, given the often-opaque nature of the crypto world. She assured informants of anonymity and reiterated the big rewards that have been previously granted to individuals who provided critical information.
The whistleblower could even get a higher bounty as he submitted a payout claim in connection with a third related action by a state regulator, as long as the informant was eligible for an award in the underlying CFTC action. However, the US regulators consider several factors in determining the size of whistleblower awards. As long as their internal disclosure prompted a company investigation, they can benefit from all the information discovered in that investigation.
