SEC’s whistleblower payments top $1.35 billion, collects $5 billion

abdelaziz Fathi

The Securities and Exchange Commission said the total amount of payouts under its whistleblower program had topped $1.35 billion after the agency awarded $20 million to a tipster for flagging wrongdoing.

That marks yet another milestone for the top US cop’s whistleblower program, which was created by the 2010 Dodd-Frank Act and that was only implemented in 2011.

The SEC, which began paying disbursements to whistleblowers in 2012, said the last bounty was granted to one person for blowing the whistle in an unknown wrongdoing. The tipster’s information and assistance led to successful enforcement actions by the federal agency.

Under the SEC’s program, whistleblowers can also be paid for information that prompts sanctions by other regulators, as long as they were eligible for an award in the underlying SEC action.

While it didn’t name the case involving the company that the award was connected to, the SEC said the whistleblower provided crucial information on an illegal scheme that was shared with the agency’s staff. The regulators’ interaction with him included multiple meetings and the identification of key documents and witnesses.

“Whistleblowers may lead to the success of an enforcement matter by providing information that causes an investigation or examination to open or that meaningfully advances an existing investigation,” said Creola Kelly, Chief of the SEC’s Office of the Whistleblower.

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. However, whistleblowers should also report to the SEC within 120 days of the internal disclosure. Then, the commission uses the date of the internal report in determining whether they provided original information.

The SEC’s whistleblower program was established in 2010 to encourage individuals to report high-quality tips and help the agency detect wrongdoing and better protect investors. The program is said to have significantly strengthened the SEC’s enforcement of the federal securities laws. Since the program’s inception, enforcement matters brought using original information from meritorious whistleblowers have resulted in orders for more than $5 billion in total monetary sanctions.

 

Read this next

Inside View

Broadridge report finds 27% of firms’ overall IT budget goes to digital transformation

“A new chapter in digital transformation is emerging. In our work with clients across the financial services industry we see leading firms are already reaping the benefits from digitalization and the use of technologies such as AI and blockchain/DLT, as they adapt to economic headwinds and new competitive dynamics”

Executive Moves

Ripple announces Monica Long as President

“I’m incredibly honored to take on the role of President at Ripple as we expand deeper into crypto-enabled services like liquidity, settlement and custody.”

Executive Moves

Arabesque AI appoints Carolina Minio Paluello as CEO

“Arabesque AI is uniquely positioned to service the asset management industry’s need to meet the growing market demand for hyper customised portfolios.”

Industry News

SEC Commissioner Mark T. Uyeda says standardized ESG measures are doomed to fail

“Because ESG ratings may be divorced from matters of financial materiality, they can reflect a particular political or social agenda.”

Industry News

Worldline launches digital payments suite in India

“Our low-cost innovative offering SoftPOS will empower SMBs in a big way to accept digital payments affordably.”

Technology

cTrader Web 4.5 Presents Guest Mode, Multiple Charting and Copy Improvements

Spotware has announced the release of its cTrader Web version 4.5, which comes with a whole range of features and improvements for all cTrader users.

Technology

SteelEye suggests integrated surveillance as Morgan Stanley fines employees over WhatsApp

“The use of integrated surveillance means firms can avoid unwanted regulatory attention by enabling them to self-report and self-remedy more efficiently when malpractice is flagged.”

Industry News

ASIC bans Gregory William Finerty for unlicensed FX algo trading bot

Bradford AI leased an algorithmic trading program known as ‘Robot 1’ to trade on the FX market, using an Australia-based over the counter contracts for difference (CFD) broker.

Opinion

With the recent changes to St Vincent licensing, what will the future trends be for licensing in 2023?

New St. Vincent and the Grenadines regulations came as somewhat of a shock for those brokerages that are only regulated in SVG

<