The Securities and Exchange Commission (SEC) has rewarded two whistleblowers whose tips and cooperation were instrumental in a major enforcement action over $24 million. According to the regulator, this case underscores the vital role whistleblowers play in unveiling misconduct that might otherwise remain hidden.

Timely Information

The first whistleblower, who initially reported the misconduct, was awarded $4 million. Their timely information prompted the SEC to open an investigation. However, the second whistleblower Whistleblower A whistleblower is an individual who manages to provide information or activity within a private or public organization that is deemed illegal, unethical, or not correct. In many countries, including the United States, whistleblowers are protected by law and in some cases can even recoup rewards if their information leads to successful prosecution.In the context of the financial services industry, whistleblowers play a large role in oversight, helping unmask several episodes of illicit behavior A whistleblower is an individual who manages to provide information or activity within a private or public organization that is deemed illegal, unethical, or not correct. In many countries, including the United States, whistleblowers are protected by law and in some cases can even recoup rewards if their information leads to successful prosecution.In the context of the financial services industry, whistleblowers play a large role in oversight, helping unmask several episodes of illicit behavior Read this Term received a larger share, $20 million. Their detailed insights and ongoing cooperation were also crucial in securing a successful outcome, particularly in a case involving complex actions overseas.

Commenting about the award, Creola Kelly, the Chief of the SEC’s Office of the Whistleblower, said: “Today’s awards highlight the incredible public service provided by whistleblowers. The information would have been difficult to obtain in the absence of the whistleblowers as it pertained to conduct occurring abroad.”

Today we announced awards of more than $24 million to two whistleblowers whose information and assistance led to an SEC enforcement action and an action brought by another agency. https://t.co/mpYKWeJnFs pic.twitter.com/bxfzxHfJ37

— U.S. Securities and Exchange Commission (@SECGov) August 26, 2024

The SEC’s whistleblower program is entirely funded by monetary sanctions imposed on securities law violators. Payments are made from an investor protection fund created by Congress, ensuring that the program does not draw from taxpayer money.

Whistleblowers can receive between 10% and 30% of the monetary sanctions collected, provided the total exceeds $1 million. The SEC’s recent $24 million payout demonstrates the effectiveness of its whistleblower program, the commission mentioned.

Other Rewards

Similarly, the SEC awarded a whistleblower $37 million last month for providing important information in another enforcement action. The agency mentioned that the whistleblower provided unique information unknown to the SEC, significantly assisting in the investigation.

The unidentified individual reportedly conserved valuable SEC assets and time by meeting with the enforcement staff and highlighting potential witnesses and documents. Their action was reportedly crucial in the enforcement action and returned millions to affected investors.

Kelly mentioned: “Today's award illustrates the importance of the SEC's whistleblower program, as the whistleblower's information helped the agency return millions of dollars to harmed investors.”