Seven individuals who acted as whistleblowers have been granted more than $104 million by the U.S. Securities and Exchange Commission. This combined reward, which is the fourth largest in the history of the SEC’s whistleblower program, was given Aug. 4, according to an SEC news release.
“Today’s awards show that specific and credible information plays an integral part in the SEC’s enforcement efforts,” Creola Kelly, chief of the SEC Office of the Whistleblower, said in the release. “These whistleblowers provided information that helped Enforcement staff detect and prosecute wrongdoing in a timely manner.”
These individuals played a crucial role by providing information and support that resulted in a successful SEC enforcement action, along with related actions pursued by another agency. This award highlights its significance in promoting accountability and ethical behavior in the financial sector, the release reported.
Among the seven whistleblowers, there were two pairs of joint claimants and three individual claimants. Their contributions were pivotal in either instigating the commencement of or substantially enhancing an SEC investigation. Their cooperation with the SEC staff encompassed various aspects, including furnishing documentation that substantiated allegations of misconduct, participating in interviews and pinpointing potential witnesses, the release said.
Payments to these whistleblowers stem from an investor protection fund that Congress established, entirely funded through monetary penalties imposed on securities law violators, according to the release.
Whistleblower compensation, ranging from 10-30% of collected fines when monetary sanctions surpass $1 million, is disbursed through this system. Importantly, harmed investors are not impacted as the awards are financed solely by sanctions paid to the SEC, the release said.
Whistleblowers become eligible for rewards when they voluntarily present original, timely and credible information that ultimately leads to a successful enforcement action, the release reported. As long as these individuals adhere to the stipulated filing requirements in the whistleblower rules, they stand to receive recognition for their contributions.
