On September 30, the U.S. Securities and Exchange Commission (SEC) announced an approximately $30 million award granted to two whistleblowers. The whistleblowers were insiders at the company whose misconduct they reported, and their disclosures led the SEC to open an investigation.
The first whistleblower was awarded approximately $22 million for first alerting the SEC to the potential wrongdoing. The first whistleblower provided both significant information and “substantial, ongoing assistance” to the SEC. The second whistleblower received an award of approximately $7 million for providing additional valuable information.
“The information and assistance provided by today’s whistleblowers helped the agency return tens of millions of dollars to harmed retail investors,” said Jane Norberg, Chief of the SEC’s Office of the Whistleblower. “We hope that awards like the ones issued by the Commission today will continue to incentivize individuals to come forward and report high-quality tips to the SEC.”
Earlier this week, the SEC granted an award to its one-hundredth whistleblower. Since issuing its first award in 2012, the SEC has awarded approximately $557 million to whistleblowers. Under the Dodd-Frank Act, qualified SEC whistleblowers, individuals who voluntarily provide original information that leads to a successful enforcement action, are entitled to monetary awards of 10-30% of funds collected by the government.
Last week, during a vote on rule changes to the whistleblower program, all five of the SEC Commissioners praised the success of the program. SEC Chairman Jay Clayton stated, “the whistleblower program has been a critical component of the Commission’s efforts to detect wrongdoing and protect investors and the marketplace, particularly where fraud is well-hidden or difficult to detect.”
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