The U.S. Securities and Exchange Commission (SEC) has awarded a whistleblower more than $5.5 million for providing “critical information that helped (regulators) uncover an ongoing scheme” to defraud investors, the agency said in a Jan. 6 announcement.
According to the SEC, the whistleblower in this case was employed at the company involved in the wrongdoing and reported information directly to the SEC. These tips enabled SEC authorities to make a successful enforcement action and end the scheme.
“Whistleblowers play a key role in bringing wrongdoing to the SEC’s attention, and this whistleblower helped prevent further harm to a vulnerable investor community by boldly stepping forward while still employed at the company,” said Jane Norberg, Chief of the SEC’s Office of the Whistleblower.
SEC enforcement actions from whistleblower tips have resulted in more than $904 million in financial remedies. With this latest award, the SEC’s whistleblower program has awarded approximately $142 million to 38 whistleblowers since program was created under the Dodd-Frank Act in 2011. The SEC whistleblower program issued its first award in 2012.
By law, the SEC protects the confidentiality of whistleblowers and does not disclose information that could directly or indirectly reveal the whistleblower’s identity. Whistleblowers may be eligible for an award when they voluntarily provide the SEC with original and useful information that leads to a successful enforcement action.
Whistleblower awards can range from 10 percent to 30 percent of the money collected when the monetary sanctions exceed $1 million. All payments are made out of an investor protection fund established by Congress, which is financed entirely through monetary sanctions paid to the SEC by securities law violators. No money is taken or withheld from harmed investors to pay whistleblower awards.