The U.S. Securities and Exchange Commission (SEC) has announced awarding more than $28 million to seven individuals. These whistleblowers played a pivotal role in a successful SEC enforcement action by providing critical information and assistance. The group of seven whistleblowers comprised one individual claimant and two sets of joint claimants. Their contributions were significant in advancing the SEC’s investigation.
Impact of the Whistleblowers’ Information
The individual claimant and the first pair of joint claimants supplied detailed and vital information early in the investigative process, which saved the SEC staff considerable time and resources. The second set of joint claimants provided new information, albeit more limited, at a later stage of the investigation.
Creola Kelly, Chief of the SEC’s Office of the Whistleblower, emphasized the valuable role these whistleblowers played. Their information and substantial assistance were crucial in enabling the SEC to recover millions of dollars for investors harmed by securities law violations.
Funding of Whistleblower Payments
The payments to these whistleblowers are sourced from an investor protection fund established by Congress. This fund is financed entirely by monetary sanctions paid to the SEC by violators of securities laws. Importantly, no funds are taken or withheld from harmed investors to finance these whistleblower awards.
Whistleblower Award Eligibility and Confidentiality
Whistleblowers become eligible for an award when they voluntarily provide the SEC with original, timely, and credible information that leads to a successful enforcement action. The amount awarded can range from 10 to 30% of the money collected when the monetary sanctions exceed $1 million. In line with the provisions of the Dodd-Frank Act, the SEC maintains the confidentiality of whistleblowers, ensuring that no information is disclosed that could potentially reveal their identities.
