SEC Awards $700,000 to Whistleblower Following Investigation

The U.S. SEC has made a whistleblower award of almost $700,000 to a claimant whose prompt reporting led the agency to open an investigation. The SEC whistleblower suffered “undue hardship” as a result of their activities.

June 22 2020 | AtoZ MarketsThe U.S. Securities and Exchange Commission (SEC) announces an award of almost $700,000 to a whistleblower whose significant information helped the agency bring a successful enforcement action that resulted in the return of money to harmed investors. The whistleblower reported the problem internally before contacting the SEC in an effort to remedy the conduct and provided continued assistance throughout the SEC’s investigation.

“Because of the whistleblower’s actions, the agency was able to identify the misconduct and conserve time and resources during the investigation,” said Jane Norberg, Chief of the SEC’s Office of the Whistleblower.  “This whistleblower stepped forward and helped the agency to protect and compensate harmed investors.”

SEC whistleblower awards skyrocket

The SEC has awarded almost $501 million to 84 individuals since issuing its first award in 2012.  The award marked the continuation of what has been the most active stretch in the history of the SEC Office of the Whistleblower, with 11 awards totaling nearly $70 million issued since the beginning of the year. Eight of these awards occurred within a six-week period between March 23 and May 4, 2020.

All payments are made out of an investor protection fund established by Congress. Payments are financed entirely through monetary sanctions paid to the SEC by securities law violators. No money has been taken or withheld from harmed investors to pay whistleblower awards.

Determining size of award

Whistleblowers may be eligible for an award when they voluntarily provide the SEC with original, timely, and credible information that leads to a successful enforcement action.  Whistleblower awards can range from 10 percent to 30% of the money collected when the monetary sanctions exceed $1 million. Whistleblowers who suffer adverse consequences for doing the right thing may be entitled to greater awards.

As set forth in the Dodd-Frank Act, the SEC protects the confidentiality of whistleblowers. It also does not disclose information that could reveal a whistleblower’s identity.

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