The US Securities and Exchange Commission (SEC) today awarded two outsiders more than $8 million each for helping stop illegal practices and uncovering securities law violations made by their company.
According to an official statement, the tipsters provided a wealth of information that helped the SEC bring enforcement actions quickly and efficiently. The duo not only helped the watchdog open the case, but also provided timely ongoing assistance along with critical documents and testimony that accelerated the pace of its enforcement action.
This brings the Whistleblower program’s total endowment to approximately $176 million since issuing its first award in 2012. SEC enforcement actions from tip-offs have resulted in more than $1 billion in fines since the program’s inception in 2011.
Committed to protecting the anonymity of informants, the SEC did not disclose their identities or that of the organization involved. The regulator discloses no information that could directly or indirectly reveal their identity. However, the SEC acknowledged that the whistleblower’s original information alerted the agency to a case of fraud.
More specifically, the top US regulator said that the first whistleblower provided information that alerted its enforcement staff of the particular misconduct and then assisted in the agency’s subsequent strike against the involved entity.
A second anonymous tipster provided additional information and ongoing cooperation.
Jane Norberg, Chief of the Office of the Whistleblower, commented: “Whistleblowers have played a crucial role in the progression of many investigations and the success of enforcement actions since the inception of the whistleblower program. The value of whistleblowers can be seen in the more than $1 billion in financial remedies ordered against wrongdoers based on actionable information from whistleblowers, including more than $671 in disgorgement of ill-gotten gains, much of which has been or is scheduled to be returned to harmed investors.”
Whistleblowing has become a staple of multiple US regulatory regimes, namely those of the US Commodity Futures Trading Commission (CFTC) and the SEC. Both entities have deployed a system of programs and rewards in a bid to help support and streamline investigations.
Whistleblowers who voluntarily provide information to the commission leading to a successful enforcement action of $1 million or more are entitled to between 10 and 30 percent of the money that the SEC recovers from those sanctions.
