Consumer Fraud

SEC announces record $30 million whistleblower reward

whistleblower SEC announces record $30 million whistleblower rewardThe U.S. Securities and Exchange Commission (SEC) said Monday that it will pay a whistleblower more than $30 million for providing the agency with original information that was key in helping secure a successful enforcement action and recovery.

The award is the largest ever the SEC has paid to a foreign whistleblower and is the fourth award the regulator has paid to a whistleblower in a foreign country, demonstrating the international reach of the SEC’s Office of the Whistleblower since it opened in July 2010.

“This whistleblower came to us with information about an ongoing fraud that would have been very difficult to detect,” said Andrew Ceresney, Director of the SEC’s Enforcement Division. “This record-breaking award sends a strong message about our commitment to whistleblowers and the value they bring to law enforcement.”

Sean McKessy, Chief of the SEC’s Office of the Whistleblower said that when it comes to fighting securities fraud, international borders are not an issue. “We effectively utilize valuable tips from anyone, anywhere to bring wrongdoers to justice,” Mr. McKessy said. “Whistleblowers from all over the world should feel similarly incentivized to come forward with credible information about potential violations of the U.S. securities laws,” he added.

The SEC’s whistleblower program rewards whistleblowers who provide the agency with good, original evidence that results in a successful SEC enforcement action with sanctions exceeding $1 million.

Whistleblower awards can range from 10 percent to 30 percent of the money collected in a case. The money the SEC pays to whistleblowers comes from an investor protection fund established by Congress at no cost to taxpayers or investors harmed by fraud. The fund is financed through monetary sanctions paid by securities law violators to the SEC.

The previous record for an SEC award paid to a whistleblower was $14 million. The SEC announced that award in 2013. The agency paid its first-ever reward to a whistleblower in 2012, about two years after the program was established under the Dodd-Frank Wall Street Reform and Consumer Protection Act to help prevent the same fraud that contributed to the economic collapse of 2007-2008.

Since then, the SEC whistleblower program has seen consistent growth year after year. The agency has paid nine whistleblower rewards so far this year.

Source:

U.S. Securities and Exchange Commission