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Whistleblower Business – U.S. SEC awards $900,000 for exposing overseas violations

SEC awarded millions to whistleblower
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The U.S. Whistleblower programs of regulators such as the SEC and CFTC are becoming a lucrative business for agencies that focus on the procurement of whistleblower information. This includes activities outside the U.S. This week the SEC awarded $900,000 for the detection of securities law violations overseas. Whistleblowers get their awards from monetary sanctions paid to the regulator from the offenders.

The SEC has awarded more than $721 million to 114 individuals since issuing its first award in 2012. All payments are made out of an investor protection fund established by U.S. Congress that is financed entirely through monetary sanctions paid to the SEC by securities law violators. Whistleblower awards can range from 10-30% of the money collected when the monetary sanctions exceed $1 million.

Currently, EU regulators have not yet implemented such powerful and efficient whistleblower reward programs. This would require that the EU regulators also have to be authorized to initiate and execute out regulatory enforcement actions, monetary sanctions, or lawsuits. This is not the case in all EU regimes today. Therefore, the EU regulators are toothless compared to their US counterparts.

CategoriesSEC

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