SEC hands out $37 million to whistleblower

The Securities and Exchange Commission has awarded a whistleblower with $37 million for providing new and critical information that led to the success of an enforcement action.

According to the agency’s order, one whistleblower received the regulatory bounty for information and assistance that led the staff to open the investigation into “hard-to-detect violations.” He was the initial source that alerted the SEC to a previously unknown conduct and thereafter provided assistance that helped advance investigations. Specifically, he gave useful information at the earliest stages of the investigation and later provided supplemental information.

Committed to protecting the anonymity of informants, neither the tipster nor the firm accused of misconduct were identified by the regulatory agency.

“Today’s award illustrates the importance of the SEC’s whistleblower program, as the whistleblower’s information helped the agency return millions of dollars to harmed investors,” said Creola Kelly, Chief of the SEC’s Office of the Whistleblower.

Since the program’s inception, the SEC has awarded roughly $2 billion to whistleblowers. The agency says these payouts have been instrumental in helping it detect and prevent a wide range of securities violations, including insider trading, accounting fraud, and bribery.

The payout was the largest ever made by the SEC under its whistleblower program, which was established as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act in 2010. The program offers monetary incentives to individuals who report possible violations of securities laws to the SEC, and whose information leads to successful enforcement actions.

Whistleblowers are entitled to receive between 10% and 30% of the monetary sanctions collected by the SEC in cases where their information leads to successful enforcement actions. The size of the payout is determined by the SEC based on a number of factors, including the significance of the information provided and the level of assistance the whistleblower offers in the investigation.

The SEC’s whistleblower program has come under fire in recent years from some lawmakers and business groups, who argue that it incentivizes individuals to profit from reporting on their employers or colleagues. However, supporters of the program say it is a crucial tool in the fight against corporate fraud and misconduct, and helps protect investors and promote transparency in financial markets.

Article Credit: https://financefeeds.com/cftc-hands-out-37-million-to-whistleblower/