Whistleblowers are perhaps the most important weapon in the fight against cybercrime, scams, and regulatory violations. The U.S. Securities and Exchange Commission (SEC) recently awarded $3.8 million to a whistleblower who provided significant information that helped the SEC disrupt an ongoing fraudulent scheme. The agency’s resulting enforcement action returned millions of dollars to harmed investors.
Since the beginning of the program nearly ten years ago, the SEC has ordered more than $2.5 billion in financial remedies based on whistleblower information, including more than $1.4 billion in disgorgement and prejudgment interest, of which almost $750 million has been returned or is scheduled to be returned to harmed investorsJane Norberg, Chief of the SEC’s Office of the Whistleblower.
The SEC has awarded approximately $505 million to 87 individuals since issuing its first award in 2012. In the last 10 months alone, the agency awarded almost $119 million to 20 individuals. These 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. No money has been taken or withheld from harmed investors to pay whistleblower awards.