The Securities and Exchange Commission (SEC) revealed it has awarded a whistleblower with $3.6 million. The whistleblower provided SEC with information and assistance significant to successful SEC enforcement action.
Emily Pasquinelli, Acting Chief of the SEC’s Office of the Whistleblower said:
The whistleblower brought valuable information to the attention of the SEC, causing it to open a new investigation into wrongdoing. The whistleblower further assisted the SEC by providing ongoing assistance as the Commission’s investigation progressed. This award shows the significant help a whistleblower can provide by sharing information of potential violations of the federal securities laws with the Commission.
So far, the agency has awarded over $842 million to a total of 157 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.
Following the Gamestop frenzy, earlier in May, SEC Chairman Gary Gensler revealed his thoughts surrounding online brokerages that dominate the execution of equity orders for retail investors. The Chairman stated that increasingly popular apps such as Robinhood’s strategically utilise game-like features in order to hook customers and keep them trading. Gensler emphasised that these sorts of issues are set to be a focal point when the regulator examines its rules.
The US watchdog recently obtained a temporary restraining order and an asset freeze to stop an alleged Ponzi scheme and misappropriation of investor funds by Jonathan P. Maroney through several entities he controls.
