SEC Issues Record Whistleblower Award of $279M

SEC Issues Record Whistleblower Award of $279M

The largest-ever whistleblower award, worth $279 million, has been granted by the United States Securities and Exchange Commission (SEC). Typically, awards ranging from 10% to 30% of collected monetary sanctions exceeding $1 million are issued by the SEC.

For a whistleblower to qualify for an award, they must provide information that directly assists the SEC in imposing enforcement actions on a specific case. In a statement made on May 5, the SEC confirmed that the $279 million awarded to the anonymous whistleblower surpassed the previous record of $114 million, set in October 2020.

Furthermore, the latest award surpasses all the whistleblower awards granted in 2022, with the SEC having distributed $229 million in 103 awards during that year.

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.

Gurbir Grewal, director of the SEC’s division of enforcement

The investor protection fund, which provides these awards, has been set up by the U.S. Congress and is financed by monetary sanctions collected by the SEC from securities law offenders. This fund is not sourced from the funds that are owed to affected investors.

To safeguard the privacy of the whistleblower, the SEC does not disclose the identity of the whistleblower or the specific case that the award relates to.

It is uncertain whether the award is linked to a significant securities violation in either the crypto sector or on Wall Street.

The SEC has, however, stated that the whistleblower assisted in providing crucial information in a case that was already under investigation.

The whistleblower’s sustained assistance, including multiple interviews and written submissions, was critical to the success of these actions.

Creola Kelly, the chief of the SEC’s office of the whistleblower

She added:

While the whistleblower’s information did not prompt the opening of the Commission’s investigation, their information expanded the scope of misconduct charged.

Under the Dodd-Frank Wall Street Reform and Consumer Protection Act, which was signed into law by former President Barack Obama in 2010, the SEC introduced its whistleblower incentive program. The same law also established a comparable program for the Commodities Futures Trading Commission.

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