The US financial markets regulator announced awards of more than USD 28 million combined to seven individuals whose information and assistance led to a successful enforcement action. Each of the claimants provided information that significantly contributed to an investigation, the Securities and Exchange Commission (SEC) said in a statement. The single claimant and first set of joint claimants provided significant and detailed information early in the investigation, which saved staff considerable time and resources. The second set of joint claimants provided new, but more limited, information later in the investigation.
“These whistleblowers provided valuable information and substantial assistance that played a critical role in the SEC returning millions of dollars to harmed investors,” said Creola Kelly, Chief of the SEC’s Office of the Whistleblower. Payments to whistleblowers are made out of an investor protection fund, established by Congress, which is financed entirely through monetary sanctions paid to the regulator by securities law violators. No money has been taken or withheld from harmed investors to pay whistleblower awards. Whistleblowers may be eligible for an award when they voluntarily provide it with original, timely, and credible information that leads to a successful enforcement action.
Whistleblower awards can range from 10 to 30 per cent of the money collected when the monetary sanctions exceed USD 1 million. Under Dodd-Frank Act, the SEC is bound to protect the confidentiality of whistleblowers and not disclose any information that could reveal a whistleblower’s identity.