SEC Awards $2 Million to Whistleblowers

The U.S. Securities and Exchange Commission (SEC) recently announced the payment of nearly $2 million to three whistleblowers.

Out of the three awards, the largest will go to a whistleblower who voluntarily provided original information that prompted the SEC to open its investigation. This whistleblower, who will receive about $1.8 million, continued to provide valuable information throughout the investigation.

The other two whistleblowers will receive roughly $65,000 each for providing information after the investigation started.

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So far the SEC’s whistleblower program has paid over $57 million to 26 whistleblowers since the program’s inception in 2011. Whistleblowers may be eligible for an award when they voluntarily provide the SEC with unique and useful information that leads to a successful enforcement action.

Whistleblower awards can range from 10% to 30% of the money collected when the monetary sanctions exceed $1 million. All payments are made out of an investor protection fund established by Congress that is financed entirely through monetary sanctions paid to the SEC by securities law violators. It is also worth mentioning that no money is taken or withheld from harmed investors to pay whistleblower awards.

Sean X. McKessy, Chief of the SEC’s Office of the Whistleblower, commented:

We’re seeing a significant uptick in whistleblower tips over prior years, and we believe that’s attributable to increased public awareness of our program and the tens of millions of dollars we’ve paid to whistleblowers for information that helped us bring successful enforcement actions.

By law, the SEC protects the confidentiality of whistleblowers and does not disclose information that might directly or indirectly reveal a whistleblower’s identity.