SEC Awards $2.2m to Whistleblower Despite Reporting Tip to Other Agency

The US Securities and Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term Commission (SEC) 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 program continues to see sizable awards given to company insiders and individuals. Since installed in 2012, the program has been instrumental in procuring information for investigations. The latest award has seen $2.2 million awarded to an individual even after reporting information to another federal agency first.

Since the program’s inception, a total of $264 million has been doled out to 54 whistleblowers, correlating to over $35 million per year. The role of whistleblowers has been key to several investigations, notably investigations into failings of disclosures in the banking and financial services space.

The most recent award of $2.2 million was given by the SEC, despite reporting the relevant information to another federal agency first. This reflects the first paid award justified by the “safe harbor” rule of Exchange Act Rule 21F-4(b)(7). This law stipulates that a whistleblower can submit information to another federal agency as well as the SEC within 120 days, whereby being treated as though the SEC received the information simultaneously.

Jane Norberg, Chief of the SEC’s Office of the Whistleblower, commented on the act: “Whistleblowers, especially non-lawyers, may not always know where to report, or may report to multiple agencies. This award shows that whistleblowers can still receive an award if they first report to another agency, as long as they also report their information to the SEC within the 120-day safe harbor period and their information otherwise meets the eligibility criteria for an award.”

The range of whistleblower awards varies between 10 and 30 percent of the money collected when sanctions exceed $1 million. The programs each have their roots back in the 2010 Dodd-Frank Act – the whistleblower program was originally established by Congress to help incentivize whistleblowers to provide specific, timely and credible information about federal securities law violations.