SEC’s ‘Whistleblower Awards’ keep getting bigger and bigger

Rick Steves

The SEC has awarded more than $900 million over the life of the program, including almost $85 million to nine individuals in this month alone, the latest being $28 million to one whistleblower.

Jailed Yen derivatives trader ordered to pay back

Financial fraud is rising. That fact has been reported by several industry authorities across the globe. The SEC, however, has found a way of countering these crimes by making it worthwhile to ‘blow the whistle’.

Whistleblower awards can range from 10-30% of the money collected when the monetary sanctions exceed $1 million. The rise of both the cryptocurrency market and crypto scams should be one of the leading causes of the record-breaking figures awarded by the regulator.

The SEC does not provide information regarding the whistleblowers nor the cases they helped with, but ever since initial coin offerings became the new fad in 2017, the SEC keeps on reporting more and more whistleblower awards with bigger and bigger prizes.

The SEC has awarded more than $900 million over the life of the program, including almost $85 million to nine individuals in this month alone, the latest being $28 million to one whistleblower.

Also this week, the Securities and Exchange Commission granted more than $31 million to four individuals, including $27 million to two claimants who provided SEC staff with new information and assistance which resulted in the return of millions of dollars to harmed investors.

The SEC has awarded approximately $901 million to 163 individuals since issuing its first award in 2012, which averages $5.5 million per whistleblower in nine years. This month alone resulted in nearly double.

In 2020, the number of awards issued to whistleblowers tripled and the Commission received a record number of whistleblower tips. This year is expected to beat all those figures.

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. 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 percent to 30 percent of the money collected when the monetary sanctions exceed $1 million.

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

Regulators across the globe have been reporting an increase in scams. An FCA official said the UK regulator expects a surge in online frauds and scams in the context of the emerging crypto market and the pandemic.

This has led a total of 17 organizations in the UK to write to the Home Secretary and the Digital Secretary, urging them to include online scams in the Online Safety Bill which would be announced in the Queen’s speech next week.

In the meantime, ASIC reported a 200% surge in financial scams since the pandemic: “Australians are at risk of being scammed and losing money, and scammers are using age-old tactics in new and sophisticated ways to target people.”

Read this next

Digital Assets

Kraken signs commitment to launch regulated business in Canada

San Francisco-based cryptocurrency exchange Kraken has filed a pre-registration undertaking with a Canadian provincial regulator as it works towards becoming a regulated provider in the country.

Interviews

TT’s Keith Todd brings fixed income and cybersecurity to FIA Boca 2023

FinanceFeeds Editor-in-Chief Nikolai Isayev spoke with Keith Todd about Trading Technologies’ move to fixed income after nearly 30 years of existence. TT is also proposing cooperation and transparency among competitors to tackle cyber risks.

Digital Assets

Binance joins FIDO Alliance to enhance user security with introduction of passkeys

“With passkeys, a user can quickly and safely sign in across multiple sites, apps, and devices with local biometric authorization. Binance will offer users a more secure and streamlined experience using passkeys on our platform without compromising on security”.

Digital Assets

ipaymy taps TripleA in Singapore for rent, invoices, taxes, salaries in Crypto

“Our white label crypto payment solution enables our partners to reap the benefits of accepting crypto payments, without managing crypto on their balance sheets. This makes it an ideal solution for businesses looking to offer cryptocurrency payments volatility-free.”

Industry News

London and New York rank joint first as top financial centers, according to…London

“The UK remains one of the most open and global financial centres with better access to international markets than the US, France, or Japan. But our competitive advantage is at risk.”

Interviews

Sterling Trading Tech (STT) discusses their Risk & Margin System at FIA Boca 2023

FinanceFeeds Editor-in-Chief Nikolai Isayev spoke with Chief Customer Officer Keith Cacciola and Managing Director of Business Development Andrew Actman about STT’s competitive advantages, the challenges their clients face today, the firm’s product roadmap and new leadership at STT.

Institutional FX

Swedish online brokerage pioneer Nordnet deploys Citi Securities Lending Access platform

“Nordnet was one of the first online brokers in Sweden and has since expanded into a pan-Nordic leading digital platform for savings and investments. We are proud to add this collaborative initiative to our ever-growing list of market innovations for our customers.”

Digital Assets

Elwood integrates Fireblocks to further connect digital asset ecosystem

“As a first port of call, the integration of Fireblocks will enhance the portfolio management system experience for clients, providing users with a comprehensive view of their current and historical digital asset positions across all venues, including their Fireblocks movements and balances.”

Industry News

OKX to open office in Australia, starts rivalry with Kraken in Formula 1

“Our ambition is straightforward – to become the leading crypto platform in the world. We see Australia as an indispensable part of this strategy and a key growth market.”

<