The U.S. Securities and Exchange Commission (SEC) announced on Tuesday that it had given joint tipsters who provided “important information” for one of the agency’s enforcement operations a whistleblower reward totaling more than $28 million.
According to the agency, the anonymous whistleblowers’ information led to the launch of an SEC inquiry and ultimately to a successful action.
The SEC withheld information on the enforcement action at issue.
The SEC’s whistleblower program, which was established in the wake of the global financial crisis that spanned 2007–2009, is largely regarded as a huge success. As of the fiscal year that ended on September 30, 2022, it had led to orders for monetary sanctions totaling more than $6.3 billion.
“Whistleblowers play an instrumental role in helping the SEC detect and prosecute wrongdoing and in protecting investors and the capital markets,” said Creola Kelly, Chief of the SEC’s Office of the Whistleblower. “Whistleblowers perform an incredible public service, as reflected by today’s award.”
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 someone voluntarily gives the SEC new, accurate, and reliable information that results in a successful enforcement action, they may be entitled to a reward. When monetary punishments surpass $1 million, whistleblower compensation can vary from 10 to 30 percent of the money collected.
Through fiscal 2022, the SEC has given out more than 300 awards totaling more than $1.3 billion to people in exchange for their information, the agency reported in November. In October 2020, one tipster received the $114 million prize which was the highest ever made.