US SEC Awards $10M to Whistleblower Months after Programme Amendment

The US Securities and Exchange Commission (SEC) has awarded over $10 million to a new whistleblower whose information helped in the recovery of 'a significant amount' of harmed investors’ money.

The new award, which was announced on Monday, comes two months after the securities market regulator announced some amendments to its whistleblower programme.

The SEC said the whistleblower’s information and assistance contributed to the success of an enforcement action it had executed.

“The whistleblower provided important documents and met twice with Enforcement staff. The charges in the covered action had a close nexus with the whistleblower’s allegations, which were critical to the underlying investigation,” the SEC commented.

The markets supervisor noted that awards given to whistleblower stand between 10 to 30% of the recovered funds when they exceed $1 million.

Recent Awards

The new monetary reward is one of several awards the SEC has issued this year.

As of July, the regulator said it had awarded approximately $1.3 billion to 278 people since its started the initiative in 2012.

In July alone, the watchdog awarded over $6 million to two whistleblowers and more than $17 million to another whistleblower.

In both cases, the whistleblowers provided critical information and assistance during the course of the regulator’s investigation and enforcement action.

In late 2021, the SEC also awarded over $10.4 million to several whistleblowers involved in three separate cases.

The regulator believes whistleblowers are critical to the enforcement of the securities laws of the United States.

“This [award] illustrates how the Whistleblower Program works to benefit, via financial remediation, investors who are victimized by those who violate our securities laws,” Creola Kelly, the Chief of the SEC’s Office of the Whistleblower, explained in the Monday statement.

Amendments to Whistleblower Programme

In August, the SEC adopted two amendments to its whistleblower programme to become effective 30 days after publication in the Federal Register.

The first amendment expanded the circumstances under which a whistleblower could be awarded by the SEC for assisting in an SEC-related action rather than waiting on another agency.

The second amendment stipulates that the watchdog could consider the size of an award only when it wants to increase it.

“I think that these rules will strengthen our whistleblower program that helps protect investors,” Gary Gensler, the Chairman of the SEC, said in a press statement announcing the amendments.