SEC paid $1 billion in awards to whistleblowers

Rick Steves

The SEC protects the confidentiality of whistleblowers and does not disclose any information that could reveal a whistleblower’s identity.

cftc

The Securities and Exchange Commission has awarded $110 million to a whistleblower this week, which stands as the second-highest award in the program’s history, following a previous $114 million prize issued in October 2020.

The whistleblower’s $110 million award consists of an approximately $40 million award in connection with an SEC case and an approximately $70 million award arising out of related actions by another agency.

With this $110 million award, the SEC’s whistleblower program has reached more than $1 billion in prizes to 207 whistleblowers, a significant milestone for this successful project.

“Today’s announcement underscores the important role that whistleblowers play in helping the SEC detect, investigate, and prosecute potential violations of the securities laws. The assistance that whistleblowers provide is crucial to the SEC’s ability to enforce the rules of the road for our capital markets”, said SEC Chair Gary Gensler.

“The whistleblower program has been instrumental to the success of numerous enforcement actions since it was instituted a decade ago. We hope that today’s announcement encourages whistleblowers to continue to come forward with credible information about potential violations of the securities laws”, SEC Director of Division of Enforcement Gurbir S. Grewal.

Emily Pasquinelli, Acting Chief of the SEC’s Office of the Whistleblower, commented: “Whistleblowers can play an extraordinary role in helping the SEC ferret out wrongdoing. Whistleblowers may provide critical information based on their own independent analysis that facilitates the SEC’s investigation and the successful resolution of the enforcement action.”

The whistleblower program issues its first award in 2012 and, less than ten years later, it has reached the $1 billion milestone.

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 10-30% of the money collected when the monetary sanctions exceed $1 million.

The SEC protects the confidentiality of whistleblowers and does not disclose any information that could reveal a whistleblower’s identity.

In late July, the financial watchdog announced plans to review the whistleblower program. SEC Chair Gensler spoke before the National Whistleblower Center and, while reemphasizing his commitment to the agency’s whistleblower program, the top official revealed he plans to review the whistleblower program in order to improve its efficiency and effectiveness.

“The tips, complaints, and referrals that whistleblowers provide are crucial to the Securities and Exchange Commission as we enforce the rules of the road for our capital markets. Each week, when I see the Commission’s enforcement actions, I’m reminded how the whistleblower program helps us be better cops on the beat, execute our mission, and protect investors from misconduct”, said SEC Chair Gary Gensler.

The head of the Securities and Exchange Commission asked staff to examine whether and how the program can be further strengthened to ensure misconduct within the remit of the SEC is identified, addressed, and stopped.

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