Consumer Fraud

SEC Awards Whistleblower $3.5 Million

SEC Office of the Whistleblower wikipedia image 342x210 SEC Awards Whistleblower $3.5 MillionThe Securities and Exchange Commission (SEC) said Monday that it awarded a whistleblower approximately $3.5 million for providing information that resulted in an investigation and subsequent enforcement action.

In order to protect the whistleblowers who provide inside information to the SEC of fraud and securities violations, the agency does not disclose details that could directly or indirectly reveal their identities. Confidentiality is also intended to encourage other potential whistleblowers to step forward.

“Whistleblowers do a tremendous service to the investing public and we will continue to reward those who come forward with valuable tips that help us bring successful cases against those who violate the securities laws,” said Jane Norberg, head of the SEC’s Office of the Whistleblower.

The SEC’s whistleblower program was established in 2011 under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. The new law included provisions directing the agency to award tipsters 10 percent to 30 percent of penalties assessed against a company for securities violations and collected as a result of information provided by the whistleblower.

In August 2016, the SEC announced that awards to whistleblower since the program’s inception passed the $100-million mark with the awards paid to about three dozen whistleblowers.

“Whistleblowers do a tremendous service to the investing public and we will continue to reward those who come forward with valuable tips that help us bring successful cases against those who violate the securities laws,” said Jane Norberg, Chief of the SEC’s Office of the Whistleblower.

The SEC’s whistleblower program has now awarded approximately $135 million to 36 whistleblowers since issuing its first award in 2012. SEC enforcement actions from whistleblower tips have resulted in more than $874 million in financial remedies. The SEC says that its whistleblower program has received more than 14,000 whistleblower tips since 2011, and has returned hundreds of millions of dollars to investors that otherwise would likely have been lost to fraud.

Although reports indicate the incoming Trump administration plans to dismantle most of the Dodd-Frank Act’s consumer protections, some experts believe the SEC’s landmark whistleblower program is likely to survive, given its support among pro-whistleblower GOP lawmakers.

Sources:
U.S. Securities and Exchange Commission
Wall Street Journal