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Whistleblowers receive over $31 million from SEC



The Securities and Exchange Commission (SEC) revealed it has awarded four whistleblowers with a total of over $31 million.

The US watchdog awarded two whistleblowers $27 million. The claimants provided SEC with new information and assistance during an existing investigation. They met with the staff of the agency in person on multiple occasions. The information they provided and their cooperation helped the SEC bring the enforcement action, which resulted in the return of millions of dollars to harmed investors.

The Commission awarded one whistleblower with $3.75 million and another with $750,000. Both of them provided information that helped the staff in an ongoing investigation independently, however, the whistleblower who received the larger amount gave information and assistance that was more important to the resolution of the overall case.

Whistleblower

Emily Pasquinelli, Acting Chief of the SEC’s Office of the Whistleblower said:

Whistleblowers play a critical role in an investigation, whether at the outset or during the course of an investigation. Today’s awards demonstrate that whistleblowers with specific, credible information who significantly contribute to the success of an existing investigation may be eligible for an award.

So far, the agency has awarded over $873 million to a total of 162 individuals since the first award was issued in 2012. Payment of the awards is taken out of an investor protection fund set up by Congress. It is financed through monetary sanctions of security law violations paid to SEC.

To be eligible for the award, a whistleblower needs to voluntarily provide the commission with reliable information that leads to successful enforcement action. The awards range between 10 and 30 % of the money collected by SEC when the sanction is for more than $1 million.

According to the Dodd-Frank Act, SEC must protect the identity of the whistleblower and not disclose any information that could reveal it.

Earlier in May, the SEC awarded a whistleblower with $3.6 million for providing information and assistance significant to successful SEC enforcement action.

Following the Gamestop frenzy, earlier in May, SEC Chairman Gary Gensler revealed his thoughts surrounding online brokerages that dominate the execution of equity orders for retail investors. The Chairman stated that increasingly popular apps such as Robinhood’s strategically utilise game-like features in order to hook customers and keep them trading. Gensler emphasised that these sorts of issues are set to be a focal point when the regulator examines its rules.

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Whistleblowers receive over $31 million from SEC

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