Consumer Fraud

Three Whistleblowers Share $7 Million SEC Award

SEC Office of the Whistleblower wikipedia image 342x210 Three Whistleblowers Share $7 Million SEC AwardA group of whistleblowers who provided tips to the Securities and Exchange Commission (SEC) about a fraudulent investment scheme will share an award of more than $7 million, the agency said Monday.

According to the SEC, the information provided by the whistleblowers led to a successful enforcement action, but the agency did not say how much the offending company was penalized. The SEC’s policy is to not reveal any information that could directly or indirectly reveal the identity of a whistleblower.

The SEC said one whistleblower provided information that served as the primary impetus for its investigation. That whistleblower will receive the lion’s share of the award, more than $4 million.

The other whistleblowers jointly provided information during the SEC’s investigation that significantly contributed to the success of the resulting enforcement action, and they will split an award of more than $3 million, the SEC’s Office of the Whistleblower said.

Monday’s award brings the total amount the SEC has awarded to whistleblowers to approximately $149 million since its first award in 2012. SEC enforcement actions from whistleblower tips have resulted in nearly $935 million in sanctions.

“Whistleblowers played an important role in the success of this case as they helped our agency detect and prosecute a scheme preying on vulnerable investors,” said Jane Norberg, Chief of the SEC’s Office of the Whistleblower. “Whistleblowers not only helped us open the investigation but provided critical information after the investigation was already underway.”

SEC 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 that is financed entirely through penalties paid to the SEC by violators of securities law.

Source: Securities and Exchange Commission