At least two people (or groups) have gotten a whistleblower windfall from the SEC, probably in time for a summer vacation and probably a lot more.
Late last month, SEC officials revealed that for two separate cases the regulator had handed out a total of $4.2 million to two whistleblowers, bringing the total in whistleblower payouts to more than $150 million.
One award, announced July 27, was for more than $1.7 million to “a company insider who provided the agency with critical information to help stop a fraud that would have otherwise been difficult to detect,” according to the SEC.
Another award, announced on July 25, amounted to “nearly $2.5 million to an employee of a domestic government agency whose whistleblower tip helped launch an SEC investigation,” officials add.
Despite what are likely to be great stories, the SEC has to keep hidden the identity of its whistleblowers and will not reveal anything further about those who “voluntarily provide the SEC with original, timely, and credible information” to help the regulator catch crooks and securities firms that cross the line.
“Whistleblower awards can range from 10 percent to 30 percent of the money collected when the monetary sanctions exceed $1 million,” according to the SEC. “All payments are made out of an investor protection fund established by Congress that is financed entirely through monetary sanctions paid to the SEC by securities law violators. No money has been taken or withheld from harmed investors to pay whistleblower awards.”
To date, the SEC has rewarded 46 whistleblowers with approximately $158 million for “useful information that led to a successful enforcement action,” officials say.
In fact, the SEC has compiled a list of the top 10 Whistleblower Awards by year (2014 had a whopper) for the past three-and-a-half years:
April 25 — Nearly $4 million
January 23 — $7 million
January 6 — $5.5 million
November 14 — $20 million
September 20 — $4 million
August 29 — $22 million
June 9 — $17 million
May 17 — $5 million to $6 million
September 22 — $30 million
September 30 — $14 million
Clearly, the whistleblowers’ tips have helped the SEC crack some key cases and have helped the regulator put the industry on notice. The program has also brought financial relief to investors that have been harmed via bad players in the industry, says Jane Norberg, chief of the SEC’s Office of the Whistleblower, in a prepared statement.
The other bit of good news is that the Trump Team appears to be fine with the whistleblower program despite other changes that are coming for the SEC and, for that matter, the CFTC. It doesn’t look as if the SEC’s program will be wound down any time soon.
So, if you’ve got a few things to tell the SEC, contact the whistleblower program and report a tip here.
No to be outdone, the CFTC also has a whistleblower program that you can reach here.