The Securities and Exchange Commission’s (SEC) whistleblower program has culminated in an influx of cash being awarded to individuals, having now surpassed the $100 million threshold on the heels of a $22 million reward earlier today, according to an SEC statement.
Whistleblowing has become a fixture of multiple US regulatory regimes, namely those of the US Commodity Futures Trading Commission (CFTC) and the SEC. Both entities have deployed programs or rewards to individuals in a bid to help support or streamline investigations.
Regulators have to date had no issue doling out substantial sums to individuals aiding in investigations. This has seen multiple awards in the millions of dollars following successful enforcement actions from both the SEC and CFTC in recent months. The whistleblower program was originally established by Congress to help incentivize whistleblowers with specific, timely and credible information about federal securities law violations to report to the SEC.
How to Prepare for CySEC’s New Tiered LeverageGo to article >>
Whistleblowers may find themselves eligible for an award when they voluntarily provide the SEC with unique and useful information that leads to a successful enforcement action. The range for said awards can vary from 10% to 30% of the money collected when the monetary sanctions ordered exceed $1 million. The SEC paid its first award in 2012, just over a year after its Office of the Whistleblower opened for business.
Despite the program’s success over the past few years, there have been some examples recently of companies pushing back via the deployment of possible gag orders and stifling measures to prevent the leakage of information. However overall, the whistleblower program has established itself as a fixture in the US.
Facts and Figures
The whistleblower program since its inception has succeeded in contributing to a number of key investigations at the SEC. Overall, the Whistleblower Office has received more than 14,000 tips from individuals across all 50 states and the District of Columbia and 95 foreign countries. A total of nearly $107 million has been awarded to 33 whistleblowers, with the largest on record being more than $30 million.
According to Jane Norberg, Acting Chief of the SEC’s Office of the Whistleblower, in a recent statement on the program: “This is a watershed moment for the SEC’s whistleblower program. The SEC has issued more than $100 million in whistleblower awards in five years, demonstrating the invaluable information and assistance whistleblowers have provided to the agency and underscoring the program’s resounding success.”
“The SEC’s whistleblower program has proven to be a game changer for the agency in its short time of existence, providing a source of valuable information to the SEC to further its mission of protecting investors while providing whistleblowers with protections and financial rewards,” noted Mary Jo White, Chair of the SEC.