The U.S. Securities and Exchange Commission (SEC) announces another generous award to a whistleblower, as it will award between $5 million and $6 million to a former company insider whose tip helped the agency uncover securities violations. These would have been nearly impossible to detect had not it been for the whistleblower’s information.
Today’s award is the SEC’s third largest to a whistleblower. In September 2014, the agency announced a more than $30 million whistleblower award, surpassing the prior highest award of more than $14 million announced in October 2013. Since the launch of the whistleblower program in 2011, the SEC has awarded over $67 million to a total of 29 whistleblowers, including one for over $3.5 million announced last week.
Whistleblower awards can range from 10% to 30% of the money collected when the monetary sanctions top $1 million. All payments are made out of an investor protection fund established by Congress that is funded through monetary sanctions paid to the SEC by securities law violators. No money is taken from harmed investors to pay whistleblower awards.
Not all regulators are as generous as the SEC. In fact, in some jurisdictions, regulators firmly reject the benefits of financial awards being given to whistleblowers. A recent example comes from Quebec, where local financial markets regulator AMF has announced it will not offer financial rewards to whistleblowers reporting violations of the laws of the Canadian province.