SEC announces $279 million record whistleblower reward

by May 7, 2023CryptoNews0 comments

The SEC distributed $229 million over 103 awards last year; the $279 million figure exceeds all whistleblower rewards given through 2022.

The greatest whistleblower compensation ever given out by the Securities and Exchange Commission of the United States (SEC) is $279 million.

The SEC typically awards amounts ranging from 10% to 30% of fines collected that total more than $1 million. To qualify for such a reward, the whistleblower must offer information that directly helps the SEC successfully impose enforcement actions on a particular case.

The $279 million payout to the anonymous whistleblower, according to a statement from the SEC on May 5, was more than quadruple the previous high of $114 million from back in October 2020.

In addition, the $279 million sum paid in this most recent instance exceeds all whistleblower rewards given out for 2022; last year, the SEC gave out $229 million among 103 awards.

Gurbir Grewal, the director of the SEC’s division of enforcement, said:

The size of today’s award — the highest in our program’s history — not only incentivizes whistleblowers to come forward with accurate information about potential securities law violations but also reflects the tremendous success of our whistleblower program.

The U.S. Congress established an investor protection fund for these awards. It is not supported by money owing to investors who have been damaged; rather, it is financed by collected fines that are paid to the SEC by people who break securities laws.

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To safeguard the whistleblower’s anonymity in these situations, the SEC does not mention the exact case to which the whistleblower award pertains or the whistleblower’s identity.

Therefore, the connection between this and a significant securities breach from Wall Street or the cryptocurrency industry is unclear.

The SEC acknowledged that the whistleblower contributed crucial information to a case it was investigating.

Creola Kelly, the head of the SEC’s office of the whistleblower, stated that “the whistleblower’s sustained assistance, including multiple interviews and written submissions, was critical to the success of these actions.”

The whistleblower’s evidence “expanded the scope of the misconduct charged,” she continued, “even though their information did not trigger the opening of the Commission’s investigation.”

The Dodd-Frank Wall Street Reform and Consumer Protection Act, which former President Barack Obama signed into law, launched the SEC’s whistleblower reward program in mid 2010. The bill also created a comparable program for the Commodities Futures Trading Commission simultaneously.

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