The U.S. Securities and Exchange Commission (SEC) has announced its largest ever whistleblower award, totaling nearly $279 million. The recipient, who remains unidentified, provided crucial information that led to a successful enforcement action by the regulator. While the specific case remains undisclosed, the award more than doubles the previous record of $114 million, issued in October 2020.
Gurbir Grewal, director of the SEC’s Division of Enforcement, emphasized the importance of whistleblowers in uncovering securities law violations, stating, “As this award shows, there is a significant incentive for whistleblowers to come forward with accurate information about potential securities law violations.”
Whistleblower payments are made from an investor protection fund, which was established by Congress and is financed entirely through monetary sanctions paid to the SEC by those found guilty of violating securities law. Awards can range from 10% to 30% of the money collected when monetary sanctions exceed $1 million.
Creola Kelly, chief of the SEC’s Office of the Whistleblower, praised the recipient’s unwavering dedication, noting that their “sustained assistance, including multiple interviews and written submissions, was critical to the success of these actions.” This landmark award underscores the SEC’s commitment to encouraging and rewarding individuals who come forward with information that aids in the enforcement of securities laws.
The record-breaking $279 million award reflects the SEC’s ongoing efforts to strengthen the whistleblower program, which has proven to be an effective tool in identifying and addressing securities law violations. Since its inception in 2011, the SEC’s whistleblower program has resulted in more than $3.6 billion in financial remedies.
In recent years, the SEC has worked to improve the whistleblower program by proposing amendments aimed at increasing transparency, providing more clarity to potential whistleblowers, and streamlining the claims review process. These efforts have led to increased cooperation between whistleblowers and the agency, ultimately enhancing the SEC’s ability to protect investors and maintain market integrity.
The continued success of the whistleblower program underscores the importance of creating and maintaining strong incentives for individuals to report potential securities law violations. As the recent $279 million award demonstrates, the SEC is committed to rewarding those who provide crucial information that leads to successful enforcement actions, ultimately safeguarding the financial wellbeing of investors and maintaining the integrity of financial markets.
With the ongoing support of whistleblowers, the SEC is better positioned to detect and prosecute securities law violations and to ensure that companies and individuals are held accountable for their actions. This record-breaking award serves as a powerful reminder of the vital role whistleblowers play in the pursuit of justice and the protection of investors.
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