SEC Sets Record with Whistleblower Award of $279 Million, Surpassing Total Awards in 2022
The SEC, which oversees financial markets in the United States, has given its biggest-ever reward to a whistleblower, amounting to a staggering $279 million.
In general, the SEC gives awards to whistleblowers that fall within the range of 10% to 30% of the monetary penalties collected, provided the amount exceeds $1 million. To qualify for such an award, the whistleblower must have provided information that directly helps the SEC in taking successful legal actions against a specific case.
In a statement released on May 5th, the SEC mentioned that the undisclosed whistleblower received a massive award of $279 million, which is more than double the previous record of $114 million set in October 2020.
In this recent case, it is noteworthy that the awarded amount of $279 million surpasses the total of all whistleblower awards given in 2022. The SEC distributed $229 million through 103 awards throughout last year.
Today we announced the largest-ever award, nearly $279 million to a whistleblower whose information and assistance led to the successful enforcement of SEC and related actions.https://t.co/GGwiZ4BQUf
— U.S. Securities and Exchange Commission (@SECGov) May 5, 2023
These awards are sourced from an investor protection fund created by Congress. The fund is financed by the monetary penalties collected by the SEC from individuals who have violated securities laws. Importantly, the awards do not come from funds owed to affected investors, but rather from this dedicated fund.
To protect the privacy of the whistleblower, the SEC does not disclose the specific case or reveal the name of the individual associated with the whistleblower award in such situations.
It remains uncertain whether this award is connected to a significant securities violation in either the cryptocurrency sector or Wall Street. Regarding the whistleblower, the SEC did mention that they played a crucial role by providing essential information on a case that the SEC was already investigating.
Creola Kelly, the head of the SEC’s Office of the Whistleblower, highlighted the vital contribution of the whistleblower, stating that their continuous support through multiple interviews and written submissions played a crucial role in the successful outcome of these actions.
Additionally, Creola Kelly mentioned that although the whistleblower’s information did not initiate the SEC’s investigation, it did broaden the range of misconduct that was ultimately addressed and charged.
The SEC’s whistleblower incentive program was created in the middle of 2010 as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act, which was signed into law by former President Barack Obama. This law also simultaneously established a similar program for the Commodities Futures Trading Commission.
