A whistleblower whose information and assistance resulted in the successful enforcement of SEC and related actions received the largest-ever reward, worth about $279 million, according to the Securities and Exchange Commission today. The $114 million whistleblower payment the SEC handed out in October 2020 has been more than doubled, making this the biggest award in the whistleblower program’s history.
Gurbir S. Grewal, Director of the SEC’s Division of Enforcement, said, “The size of today’s award – the highest in our program’s history – not only incentivizes whistleblowers to come forward with accurate information about potential securities law violations, but also reflects the tremendous success of our whistleblower program. “This success directly benefits investors, as whistleblower tips have contributed to enforcement actions resulting in orders requiring bad actors to disgorge more than $4 billion in ill-gotten gains and interest. As this award shows, there is a significant incentive for whistleblowers to come forward with accurate information about potential securities law violations.”
“The whistleblower’s sustained assistance including multiple interviews and written submissions was critical to the success of these actions,” said Creola Kelly, Chief of the SEC’s Office of the Whistleblower. “While the whistleblower’s information did not prompt the opening of the Commission’s investigation, their information expanded the scope of misconduct charged.”
Congress established an investor protection fund, which is wholly funded by monetary penalties paid to the SEC by securities law offenders. Payments to whistleblowers are made from this fund. Investors who were damaged have not had any money removed from them or held back to pay whistleblower compensation. When a whistleblower voluntarily provides the SEC with new, accurate, and reliable information that results in a successful enforcement action and complies with the whistleblower rules’ filing requirements, they may be eligible for an award. When monetary punishments surpass $1 million, whistleblower compensation can vary from 10 to 30 percent of the money collected.
According to the Dodd-Frank Act, the SEC upholds whistleblower anonymity and refrains from disclosing any material that might identify a whistleblower.
