A tipster is getting a $2.4 million from the Securities and Exchange Commission for blowing the whistle that prompted the agency to initiate an investigation and bring an enforcement action.
The SEC made the award public on Monday without naming the whistleblower or the entity involved in its probes.
In explaining the reason for its award determination, the SEC said the tipster’s assistance throughout the investigation contributed to all of the charges brought by the watchdog.
As long as a whistleblower’s internal disclosure prompted a company investigation, they can benefit from all the information discovered in that investigation. Though, they should report to the SEC within 120 days of the internal disclosure. Then the SEC uses the date of the internal report in determining whether the whistleblower provided original information.
However, the decision-making process takes some time as the agency has sorted through a flood of requests for awards and tips on potential corporate wrongdoing.
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More Than $520 Million Paid to Whistleblowers
“The whistleblower awarded today quickly came forward with critical information and helped investigative staff target key information and identify important witnesses. Information from whistleblowers has again proven to be crucial in helping the Commission detect violations and better protect investors and the marketplace,” said Jane Norberg, Chief of the SEC’s Office of the Whistleblower.
Committed to protecting the anonymity of informants, few details are available regarding the nature of the underlying facts or enforcement action or the identity of the whistleblower.
Now, the SEC has awarded approximately $523 million to 97 individuals since issuing its first award in 2012. Rewards are typically 10 to 30 percent of money paid by companies in cases where their information led to a successful enforcement action of $1 million or more.
Moreover, the SEC’s biggest whistleblower award was $50 million, shared by two former Merrill Lynch employees in March 2018. A third former Merrill Lynch employee was awarded $33 million in the same case.
The power for US regulators to issue rewards was established as part of the Dodd-Frank financial reform law that was set in 2010 for encouraging workers to speak up about wrongdoing.