An unidentified person who told the US top regulator about illegal activity at a financial institution will walk away with more than $7 million. The Securities and Exchange Commission on Friday awarded the whistleblower for “significant information,” such as identifying witnesses, in alerting SEC staff to “serious financial abuses.”

The agency explains that the tipster was eligible for the bounty after they provided unique information that was the basis for the SEC’s action against significant wrongdoing.

“The whistleblower showed great tenacity and effort in attempting to expose the misconduct that was the basis for the SEC’s action. The whistleblower’s information and assistance helped the SEC staff devise an investigative plan, craft document requests, and ultimately bring an important enforcement action focusing on serious financial abuses,” said Jane Norberg, Chief of the SEC’s Office of the Whistleblower.

The big reward comes as the regulator tries to recover from a dip in whistleblower performance throughout the previous year. In 2019, the number of whistleblower tips fielded to the country’s top markets regulator dropped for the first time since the program’s inception in 2011. The drop was partially attributed to SEC’s thinking about introducing caps on awards and giving the SEC staff more discretion to reduce certain payouts.

The SEC chief, however, took a step back following a backlash from the program advocates who claimed the changes would deter insiders from coming forward with tip-offs on fraud and other violations.

Money makes whistleblowers come forward

Committed to protecting the anonymity of informants, the SEC doesn’t provide any details of the enforcement case that came out of the whistleblower tip — a policy intended to protect the identity of the tipster.

Whistleblowers who voluntarily provide information to the commission leading to a successful enforcement action of $1 million or more are entitled to between 10 and 30 percent of the money that the watchdog recovers from those sanctions.

Today’s announcement brings the whistleblower program’s total endowment to over $394 million since issuing its first award in 2012.

The US authorities consider several factors in determining the size of whistleblower awards. As long as the whistleblower’s internal disclosure prompted a company investigation, they can benefit from all the information discovered in that investigation. However, they should also report to the SEC within 120 days of the internal disclosure; then the watchdog uses the date of the internal report in determining whether they provided original information.