Three whistleblowers awarded $18 million for successful enforcement action by SEC

Rick Steves

“All three whistleblowers provided valuable information and assistance, which played a critical role in the SEC bringing an enforcement action and returning millions of dollars to harmed investors.”

The Securities and Exchange Commission has announced three awards totaling approximately $18 million to three whistleblowers whose information and assistance led to a successful enforcement action.

The first whistleblower provided the SEC with detailed and significant information that led to the opening of an investigation into a fraudulent scheme. Their assistance saved considerable staff time and resources, and had a significant impact on the overall success of the enforcement action.

The second and third whistleblowers’ information, which was provided later in the investigation, significantly contributed to the success of the enforcement action as well, the regulator stated.

There was a fourth whistleblower that claimed an award, but the information provided was already known to the SEC during the investigation. The government agency declined to award this particular whistleblower for that reason, according to its own rules.

A critical role in returning millions of dollars to harmed investors

Creola Kelly, Chief of the SEC’s Office of the Whistleblower, said: “All three whistleblowers provided valuable information and assistance, which played a critical role in the SEC bringing an enforcement action and returning millions of dollars to harmed investors.”

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

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.

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

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