The Securities and Exchange Commission (SEC) revealed it has issued two whistleblower awards totaling more than $6 million.
The regulator noted that the whistleblowers who received the monetary awards provided key information and assistance in three separate actions.
SEC awarded a whistleblower with over $3 million. The individual was offered to invest in a product which they believed was misrepresented. The whistleblower quickly alerted the SEC to the potential misconduct, which brought about the investigation. The individual continued to cooperate with SEC’s Enforcement staff.
Another whistleblower received over $3 million for providing the regulator information which started an investigation. The individual was an insider who initially reported their concerns internally. Later they submitted a detailed tip and met with the SEC’s Enforcement staff a few times to provide additional information in the course of the investigation.
Creola Kelly, Chief of the SEC’s Office of the Whistleblower, said:
When confronted with potential wrongdoing, today’s whistleblowers refused to look the other way, but instead, chose to do the right thing by reporting it to the SEC. Insiders and outsiders alike can make a tremendous impact on the SEC’s ability to detect misconduct and protect investors when they decide to become whistleblowers.
Whistleblower awards
So far, the agency has awarded over $1.3 billion to a total of 276 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.
Earlier in January, SEC awarded four whistleblower with over $40 million.
