SEC Issues Record Whistleblower Award of $279M
The United States Securities and Exchange Commission (SEC) has issued its largest-ever whistleblower award totaling $279 million. The award is more than double the previous record of $114 million from October 2020 and exceeds the total awards issued in 2022, which amounted to $229 million across 103 awards.
Whistleblower Awards’ Role in Enforcement Actions
The SEC typically issues awards between 10% to 30% of collected monetary sanctions larger than $1 million. To qualify for an award, a whistleblower must provide information that directly assists the SEC in successfully imposing enforcement actions on a particular case.
Investor Protection Fund Finances Awards
The awards are financed through an investor protection fund established by the U.S. Congress, sourced from monetary sanctions paid to the SEC by securities law violators. Importantly, these funds do not come from amounts owed to harmed investors.
Privacy Protections for Whistleblowers
To protect the privacy of whistleblowers, the SEC does not disclose specifics about the case the award relates to or the name of the whistleblower. As a result, it remains unclear whether the latest award is tied to a major securities violation within the crypto sector or Wall Street.
Whistleblower’s Critical Assistance in the Case
The SEC did reveal that the whistleblower provided crucial information on a case it was already working on, expanding the scope of misconduct charged. The whistleblower’s sustained assistance, including multiple interviews and written submissions, proved critical to the success of the enforcement actions.
Whistleblower Incentive Program Origins
The SEC’s whistleblower incentive program was established in mid-2010 under the Dodd-Frank Wall Street Reform and Consumer Protection Act, signed into law by former President Barack Obama. The law also established a similar program for the Commodities Futures Trading Commission.