The U.S. Securities and Exchange Commission (SEC) announced in mid-May that it will award a whistleblower $5 million to $6 million for the person’s assistance in a recent investigation. The whistleblower was a former company insider who provided a detailed, unique tip that led the SEC to uncover significant securities violations it never would have found without the whistleblower’s help.
No further information was revealed about the whistleblower or the particular act that led to the enforcement action. Federal law dictates the SEC not reveal any information about a whistleblower that could compromise his or her identity.
Third-largest award ever
This award marked the third-highest award the SEC has ever provided to a whistleblower. The record high remains at $30 million, which was awarded in September 2014 to a whistleblower who provided information that led to the federal agency busting up a major fraud ring. The second-highest award was a $14 million payout in October 2013.
With two more whistleblowers receiving awards just days after this announcement was made, the SEC whistleblower program is now up to more than $68 million to 31 different whistleblowers. Whistleblowers have the opportunity to receive anywhere from 10 to 30 percent of the money collected when enforcement actions result in sanctions of more than $1 million.
The money paid out in these whistleblower awards comes from an investor protection fund that Congress owns. It is financed through sanctions that anyone who violates securities laws must pay to the SEC.
Whistleblowers now enjoy more protections than ever before. To make sure your business or organization responds promptly and effectively to these complaints, consult a dedicated attorney with Whistleblower Law for Managers in Dallas.