The Securities and Exchange Commission (SEC) has awarded a whistleblower more than US$37m after information they shared with the regulator led to successful enforcement action.
The SEC said in a statement the whistleblower persisted in reporting the misconduct internally, which led the employer to conduct its own investigation and eventually report the results to the Commission. This self-report caused the Commission to open an investigation. Without the whistleblower’s “ongoing, extensive, and timely assistance,” the SEC says it would not have learned the full context and extent of the employer’s misconduct.
“Today’s whistleblower learned of misconduct and made the difficult decision to report their concerns. This individual, who was retaliated against for their whistleblowing activity, played a crucial role in the ultimate success of the enforcement proceeding,” said Creola Kelly, Chief of the SEC’s Office of the Whistleblower.
Payments to whistleblowers are made out of an investor protection fund, established by US Congress, which is financed entirely through monetary sanctions paid to the SEC by securities law violators. 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% of the money collected when the monetary sanctions exceed US$1m.
Under the US Dodd-Frank Act, the SEC must protect the confidentiality of whistleblowers and does not disclose any information that could reveal a whistleblower’s identity.
More from RiskBusiness on whistleblowing:
Blowing the whistle: navigating controversy, regulation and perception.
