SEC awards 5 whistleblowers with $3 million

Photo: Leaprate

The Securities and Exchange Commission (SEC) announced giving more than $6 million award to five individuals for information provided in three different enforcement actions for combined payments of nearly $3 million.

The SEC awarded whistleblower almost $1.8 million. The whistleblower is a company insider who provided information that would have been difficult to detect in the absence of the tip and provided extraordinary assistance to SEC staff resulting in the return of money to investors.

The agency also awarded a total of approximately $750,000 to two whistleblowers. The first one provided a detailed tip that prompted the opening of the investigation and received an award of over $500,000. In awarding this whistleblower, the SEC exercised its discretion to waive the TCR filing requirement. The second whistleblower, who received over $250,000, provided new information that resulted in the inclusion of additional allegations in the covered action. Both whistleblowers provided substantial assistance, including participating in interviews and providing subject matter expertise.

The Commission also jointly awarded nearly $400,000 to two individuals whose analysis prompted the opening of an investigation that led to the SEC’s enforcement action. They also provided substantial and continuing assistance during the course of the investigation.

Jane Norberg, Chief of the SEC’s Office of the Whistleblower said, "Today the Commission issued awards to multiple whistleblowers whose information and assistance proved critical to several enforcement matters. In the first quarter of FY2021, the SEC has made whistleblower awards of almost $170 million to 17 individuals, which is already near the record dollar amount reached last fiscal year."

So far, the agency has awarded over $731 million to total of 123 individuals since the first award was issued in 2012, including awards to 12 individuals in the first two months of this fiscal year, totaling more than $166 million. Payment of the awards is taken out of an investor protection fund set up by Congress. It is financed through monetary sanctions of security law violations paid to SEC.

To be eligible for award, a whistleblower needs to voluntarily provide the commission with reliable information that leads to successful enforcement action. The awards range between 10 and 30 % of the money collected by SEC when the sanction is for more than $1 million.

According to the Dodd-Frank Act, SEC must protect the identity of the whistleblower and not disclose any information that could reveal it.

Reprinted from Leaprate, the copyright all reserved by the original author.