A whistleblower who provided information to the U.S. Securities and Exchange Commission (SEC) that helped federal regulators recover millions of dollars in investor funds was awarded $14 million, the largest award made by the SEC’s whistleblower program to date.
SEC officials said that the whistleblower, who wants to remain anonymous in media reports, provided original information and assistance that allowed the agency to investigate a case of financial fraud more quickly than otherwise would have been possible.
“Less than six months after receiving the whistleblower’s tip, the SEC was able to bring an enforcement action against the perpetrators and secure investor funds,” the SEC announced Tuesday in a statement.
The Commission also withheld the name of the company that it sanctioned in an effort to shield the whistleblower’s identity from the public.
The SEC established its Office of the Whistleblower in 2011 under the Dodd-Frank Act, a series of sweeping reforms signed into law in 2010 to address financial-industry fraud and avert a crisis like the one that spawned a deep recession in the late 2000s.
Under the SEC’s whistleblower program, those who potentially risk their careers and professional reputations by exposing fraud and providing regulators with high-quality, original information that leads to an enforcement action and sanctions of at least $1 million will share in the recovery. Awards under the SEC whistleblower program range from 10 to 30 percent.
“Our whistleblower program already has had a big impact on our investigations by providing us with high quality, meaningful tips,” said SEC Chair Mary Jo White. “We hope an award like this encourages more individuals with information to come forward.”
The SEC made its first payment to a whistleblower in August 2012 for $50,000. In August and September of 2013, the SEC awarded more than $25,000 to three whistleblowers who help the Justice Department stop a sham hedge fund. The ultimate recovery in that case once all the sanctions are collected is expected to exceed $125,000.