The Securities and Exchange Commission (SEC) revealed it has awarded two individuals whose information and assistance contributed to the success of an SEC enforcement action. Together they received approximately $11.5 million.
The regulator awarded one individual with nearly $7 million. They were the initial source that caused the staff to open the investigation into hard-to-detect violations and thereafter provided substantial assistance.
The second whistleblower received over $4.5 million for submitting information later, after the investigation was already underway. They received a smaller reward compared to the first whistleblower because they had delayed reporting to the Commission for several years after becoming aware of the wrongdoing.
Emily Pasquinelli, Acting Chief of the SEC’s Office of the Whistleblower said:
This case demonstrates the Commission’s continued commitment to rewarding individuals who provide high-quality tips, and particularly timely ones. These whistleblowers reported credible information that aided the Commission’s investigation and their subsequent cooperation allowed the Commission to better understand the violations that formed the basis of the enforcement action.
So far, the agency has awarded around $1 billion to a total of 212 individuals since the first award was issued in 2012. Payment of the awards is taken out of an investor protection fund set up by Congress. It is financed through monetary sanctions of security law violations paid to SEC.
To be eligible for the award, a whistleblower needs to voluntarily provide the commission with reliable information that leads to successful enforcement action. The awards range between 10 and 30 % of the money collected by SEC when the sanction is for more than $1 million.
According to the Dodd-Frank Act, SEC must protect the identity of the whistleblower and not disclose any information that could reveal it.
Last month, SEC awarded five individuals who provided information and assistance in three separate enforcement proceedings with a total of $2.6 million for their cooperation.
