Whistleblower Business: SEC Awards More than $20 Million!

SEC Whistleblower Program
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Whistleblowers are the secret weapon for enforcement agencies. And a massive business for lawyers. The U.S. Securities and Exchange Commission (SEC) recently awarded more than $20 million to a whistleblower who provided information and assistance that significantly contributed to a successful enforcement action. The whistleblower provided new information, met with Enforcement Division staff multiple times, and remained cooperative throughout the investigation.  

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 SEC payments to whistleblowers are made from an investor protection fund established by U.S. Congress. It is financed entirely through monetary sanctions paid to the SEC by securities law violators. No money is taken or withheld from harmed investors to pay whistleblower awards. Whistleblower awards can range from 10 to 30 percent of the money collected when the monetary sanctions exceed $1 million.

Nepotism Allegations

A significant portion of whistleblower rewards goes to whistleblowers’ attorneys. Without lawyers, whistleblowers have little chance of receiving rewards. It has become an enormous business that has also raised criticism of nepotism (FinTelegram report here).

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