The U.S. Securities and Exchange Commission (SEC) currently pays large sums to whistleblowers for their information and support of investigations. Just a few days ago, the US regulator announced a $98 million award to a whistleblower. Today, the SEC has awarded over $24 million to two whistleblowers whose information led to successful enforcement actions. Whistleblowing has become a big business.
Short Narrative:
The U.S. Securities and Exchange Commission (SEC) has announced two whistleblower awards totaling more than $24 million. The first whistleblower who initiated the investigation received $4 million. However, the second whistleblower, whose substantial cooperation and critical information were vital to the actions’ success, was awarded $20 million. These awards underscore the important role whistleblowers play in uncovering misconduct, particularly in cases involving conduct abroad, as noted by Creola Kelly, Chief of the SEC’s Office of the Whistleblower.
Key Details:
- Award Distribution: $4 million to the first whistleblower; $20 million to the second for more impactful contributions.
- Purpose: Awards recognize the public service of whistleblowers in providing information that would have been hard to obtain otherwise.
- Funding Source: Awards are paid from an investor protection fund, which is funded by penalties collected from securities law violators.
- Eligibility: Whistleblowers can receive 10-30% of the monetary sanctions collected when their information leads to sanctions over $1 million.
Actionable Insight:
Whistleblowers play a critical role in regulators’ enforcement actions, especially in cases involving international misconduct, and may be entitled to significant financial rewards for their contributions. In fact, whistleblowing has also become big business for the lawyers involved, some of whom have specialized in this segment. Typically, these lawyers receive an agreed percentage of the whistleblower’s award.
Read More: read the SEC press release here.
Whistleblower Request:
If you have any information about securities violations or misconduct, please contact us securely via our whistleblower system, Whistle42. Your anonymity will be protected.
