SEC Awards Whistleblower $4.1 Million For Insider Tips

SEC Office of the Whistleblower wikipedia image 342x210 SEC Awards Whistleblower $4.1 Million For Insider TipsThe Securities and Exchange Commission (SEC) on Dec. 5 announced a whistleblower award of more than $4.1 million to a former company insider who alerted the agency to a “widespread, multi-year securities law violation.”

The SEC said that after initially contacting the agency about the alleged violations, the whistleblower continued to provide important information and assistance to the SEC throughout its investigation. The whistleblower was the third awarded by the SEC in less than a week’s time.

Jane Norberg, Chief of the SEC’s Office of the Whistleblower, said that whistleblowers are instrumental in helping federal regulators finding and investigating violations of securities laws and fraud because they have eyes and ears where government officials don’t.

“Company insiders often have valuable information that can help the SEC halt an ongoing securities law violation and better protect investors,” Ms. Norberg said in an announcement. “The breadth of the SEC’s whistleblower program is demonstrated by this case, where the whistleblower, a foreign national working outside of the United States, affirmatively stepped forward to shine a light on the wrongdoing.”

The whistleblower is the 50th to be awarded by the SEC since the agency’s whistleblower office was established by the Dodd-Frank Act of 2010. The agency has now awarded more than $179 million to whistleblowers since issuing its first award in 2012.

All whistleblower awards are paid out of an investor protection fund established by Congress. The fund is financed entirely through monetary sanctions paid to the SEC by securities law violators. The SEC does not take or withhold money from harmed investors to pay whistleblower awards.

“Whistleblowers may be eligible for an award when they voluntarily provide the SEC with original, timely, and credible information that leads to a successful enforcement action,” the agency said in its announcement. SEC whistleblower awards range from 10 percent to 30 percent of the money collected when the monetary sanctions exceed $1 million.