The Securities and Exchange Commission (SEC) has announced that it will award more than $9 million to a whistleblower whose substantial information and assistance led to a successful enforcement action. The whistleblower’s repeated internal reporting of concerns and subsequent alert to the SEC’s Enforcement Division prompted an investigation into the misconduct. The whistleblower’s ongoing cooperation throughout the process was also crucial to the case.
In acknowledging the whistleblower’s contribution, Creola Kelly, Chief of the SEC’s Office of the Whistleblower, stated, “The whistleblower in this case provided critical information and continuing assistance that helped the agency recover millions of dollars for harmed investors.”
Whistleblower awards are funded from an investor protection fund established by Congress, which is financed solely through monetary sanctions imposed on securities law violators and paid to the SEC. No funds are deducted from harmed investors to compensate whistleblowers. To be eligible for an award, whistleblowers must voluntarily provide the SEC with original, timely, and credible information that leads to a successful enforcement action. Depending on the amount of monetary sanctions collected (exceeding $1 million), whistleblower awards can range from 10 to 30 percent of the total collected.
Under the provisions of the Dodd-Frank Act, the SEC maintains the confidentiality of whistleblowers and refrains from disclosing any information that could potentially reveal their identity.
For individuals seeking more information about the whistleblower program or wishing to report a tip, the SEC encourages them to visit the website www.sec.gov/whistleblower.