Whistleblower Awards: SEC Crosses $750 million in awards since 2012

Rick Steves

While “crime never pays” is far from being absolute truth, “no one likes a tattletale” has completely lost its meaning in the United States.

The Securities and Exchange Commission is on a roll. The regulator has awarded more than $1.7 million to two whistleblowers in separate proceedings. Earlier this week, the SEC awarded $9.2 million to a whistleblower who previously received an award for contributions to an SEC enforcement action based on the same information.

The most recent whistleblower awards went to an individual who provided significant evidence, including a critical declaration, that helped expedite an ongoing investigation and enabled the SEC to shut down an ongoing fraudulent scheme preying on retail investors. The person received over $900,000.

In the second-order, the SEC awarded a whistleblower over $800,000 for providing important evidence of false and misleading statements made to investors, resulting in the return of millions to harmed investors.

Jane Norberg, Chief of the SEC’s Office of the Whistleblower, said: “As these awards show, deserving whistleblowers may receive an award if they comply with the Form TCR filing requirements within 30 days of first obtaining actual or constructive notice of the filing requirement or 30 days from the date the whistleblower hires a lawyer to represent them in connection with the whistleblower’s previous submission of information to the Commission, whichever occurs first, and they otherwise meet the eligibility requirements. These whistleblowers earned their awards by providing high-quality information that supported a pair of successful Commission enforcement actions.”

Earlier this week, the financial watchdog awarded $9.2 million to an individual who provided significant information about an ongoing fraud to the SEC that enabled a large amount of money to be returned to investors harmed by the fraud. The whistleblower also provided significant assistance by traveling at the whistleblower’s own expense to be interviewed by DOJ, according to the announcement.

The regulator has awarded approximately $752 million to 138 individuals since issuing its first award in 2012.  Whistleblower awards can range from 10-30% of the money collected when the monetary sanctions exceed $1 million.

Last week, the Securities and Exchange Commission awarded two separate whistleblowers with almost $3 million in total. 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.

Whistleblower awards are never funded with money taken or withheld from harmed investors, according to the law. The SEC awards whistleblowers who voluntarily provide the SEC with original, timely, and credible information that leads to successful enforcement action.

The recent GBP Capital ponzi scheme scandal is proof of how important whistleblowers are to the success of the SEC’s mission. David Gentile’s $1.7 billion fraudulent enterprise was able stay running for four years on account of scare tactics to keep people from blowing the whistle. That allowed Gentile, with connections to the Church of Scientology and Russian organized crime, to sustain high credibility among his Wall Street peers and the media.

Whistleblower protections are a cornerstone of the SEC, which is committed to protecting whistleblowers from retaliation and attempts to stifle the free flow of information to the Commission about possible securities law violations.

While “crime never pays” is far from being absolute truth, “no one likes a tattletale” has completely lost its meaning in the United States. The SEC likes tattletales and it has never been more rewarding to expose criminals.

Read this next

Industry News

Celsius $750m insurance claims are fraud, says lawyer seeking EU crypto superfund

“It is an intentional deception in aid of a billion-dollar securities offering.”

Institutional FX

DGCX brokers authorized to provide derivatives trading and clearing services

The DFM is looking to provide multiple asset classes such as; equities, ETFs, equities’ futures, crude oil futures, etc. to meet the growing demand from its diversified base of local and international investors.

Digital Assets

EQONEX leaves “crowded crypto exchange space” amid crypto winter

“The recent extreme market volatility and declining trading volumes have added to the headwinds being felt by exchange operators. We take a realistic view that our exchange will not move the needle for us financially over the near-to-medium term.”

Digital Assets

FTX and Paradigm partner for spreads trading: lower risk, lower fees

“This structured spread trading product is the first that will enable crypto investors to utilize cash and carry trades through FTX and Paradigm.”

Industry News

SEC uncovers online retail brokerage hacking scheme

Fraudsters were able to sell their holdings at artificially high prices and reap more than $1 million in illicit proceeds, the SEC alleged. 

Executive Moves

Cornerstone FS taps James Hickman as CEO

“I see great potential in the business from its proprietary technology to its regulatory permissions. It is already delivering an exceptional service to its SME customers and the scalable platform is ideally positioned to add further product capability.”

Retail FX

FCA warns of Lite Forex Pro as crackdown on clone scams continues

The UK Financial Conduct Authority has put out a press release that warns about a new ‘clone firm’ investment scam impersonating LiteForex‎, which rebranded last year as LiteFinance.

Digital Assets

Novogratz’s Galaxy Digital backs out of $1.2 billion deal to buy BitGo

Crypto merchant bank Galaxy Digital would not move forward with its bid to buy digital-asset custodian BitGo.

Executive Moves

OctaFX elevates Nikolas Charalampous to executive director role

OctaFX has promoted its head of dealing, Nikolas Charalampous, to the role of executive director, which saw the expansion of his day-to-day responsibilities and oversight.

<