The whistleblower information led to an examination and a roadmap for an enforcement action.
Two whistleblowers were likely celebrating during the Spring holidays as they were awarded approximately $6 million by the Securities and Exchange Commission (SEC). They provided new information “that led to the opening of an examination and provided a roadmap for an enforcement action that resulted in the covered action,” according to the SEC.
The financial reward “illustrates that the agency can leverage whistleblower information in various ways, including by prompting an examination,” says Jonathan Carr, acting chief of the SEC’s Office of the Whistleblower, in a prepared statement. “If that examination ultimately results in an enforcement action, the whistleblower may be eligible for an award.”
In fiscal year 2024, the SEC “awarded over $255 million, the third highest annual amount for the program, to 47 individual whistleblowers. These totals include an award of approximately $98 million, split between two whistleblowers — the fifth-largest award granted in the history of the program. The SEC has awarded more than $2.2 billion to 444 individual whistleblowers since the program’s inception in 2011,” according to the SEC Office of the Whistleblower Annual Report to Congress for FY 2024.
“Payments to whistleblowers are made out of an investor protection fund, established by Congress, which is financed entirely through monetary sanctions paid to the SEC by securities law violators,” the SEC notes. “Whistleblowers may be eligible for an award when they voluntarily provide the SEC with original, timely, and credible information that leads to a successful enforcement action. Whistleblower awards can range from 10 to 30 percent of the money collected when the monetary sanctions exceed $1 million.”
The Dodd-Frank Act protects the confidentiality of whistleblowers, and the SEC never discloses information about a whistleblower’s identity.
More information about the whistleblower program is at: www.sec.gov/whistleblower
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