The $279 million whistleblower award recently issued by the United States Securities and Exchange Commission (SEC) is the largest ever given out by the SEC, and it comes from an investor protection fund established by the US Congress.
The United States Securities and Exchange Commission (SEC) made history by issuing its largest-ever whistleblower award, which amounted to a whopping $279 millio on May 5th This is more than double the previous record of $114 million awarded in October 2020 and the biggest amount of money that the SEC has ever given out in its investor protection fund established by the U.S. Congress.
The program, which was established in mid-2010 under the Dodd-Frank Wall Street Reform and Consumer Protection Act, is designed to incentivize individuals with information about potential securities law violations to come forward and assist the SEC in successfully imposing enforcement actions on particular cases.
According to the SEC, the whistleblower provided information that was critical to the success of multiple enforcement actions, which expanded the scope of misconduct charged. The whistleblower’s sustained assistance included multiple interviews and written submissions.
The whistleblower was not named to protect their privacy, and it is also unclear if this relates to a major securities violation from the crypto sector or Wall Street. The whistleblower incentive program generally issues awards ranging between 10% to 30% of collected monetary sanctions larger than $1 million, with the whistleblower providing information that directly assists the SEC in imposing enforcement actions on a particular case.
The SEC’s whistleblower program has been highly successful, with the regulator dishing out $229 million across 103 awards last year, making the $279 million awarded this year a significant jump. The size of this award sets a new record and is expected to further incentivize whistleblowers to come forward with accurate information about potential securities law violations. Gurbir Grewal, director of the SEC’s division of enforcement, noted that this award’s size reflects the tremendous success of the whistleblower program.
The whistleblower awards come from the investor protection fund established by the U.S. Congress and are funded via collected monetary sanctions paid to the SEC by securities law violators. The funds do not come from those owed to harmed investors. The SEC does not refer to the specific case the whistleblower award relates to or the name of the whistleblower, as protecting their privacy is crucial.
In summary, the SEC’s largest-ever whistleblower award highlights the success of the regulator’s whistleblower incentive program in encouraging individuals with information about potential securities law violations to come forward. The award’s size is a significant milestone, with the SEC dishing out $279 million, which is more than double the previous record. It is also a reminder to potential securities law violators that there are consequences to their actions and that whistleblowers will be rewarded for their cooperation with the regulator.