The Securities and Exchange Commission (SEC) has
rewarded two whistleblowers whose tips and cooperation were instrumental in a
major enforcement action over $24 million. According to the regulator, this case underscores the vital role
whistleblowers play in unveiling misconduct that might otherwise remain hidden.
Timely Information
The first whistleblower, who initially reported the
misconduct, was awarded $4 million. Their
timely information prompted the SEC to open an investigation. However, the second whistleblower received a larger share, $20 million. Their detailed insights and ongoing cooperation were also crucial in securing a successful outcome, particularly in a case involving
complex actions overseas.
Commenting about the award, Creola Kelly, the Chief of
the SEC’s Office of the Whistleblower, said: “Today’s awards highlight the
incredible public service provided by whistleblowers. The information would
have been difficult to obtain in the absence of the whistleblowers as it
pertained to conduct occurring abroad.”
Today we announced awards of more than $24 million to two whistleblowers whose information and assistance led to an SEC enforcement action and an action brought by another agency. https://t.co/mpYKWeJnFs pic.twitter.com/bxfzxHfJ37
— U.S. Securities and Exchange Commission (@SECGov) August 26, 2024
The SEC’s whistleblower program is funded entirely by
monetary sanctions imposed on securities law violators. Payments are made from
an investor protection fund created by Congress, ensuring that the program does
not draw from taxpayer money.
Whistleblowers can receive between 10% and 30% of the
monetary sanctions collected, provided the total exceeds $1 million. The SEC’s
recent $24 million payout demonstrates the effectiveness of its whistleblower
program, the commission mentioned.
Other Rewards
Similarly, the SEC awarded a whistleblower $37 million
last month for providing important information in another enforcement action.
The agency mentioned that the whistleblower provided unique information unknown
to the SEC, significantly assisting in the investigation.
The unidentified individual reportedly conserved
valuable SEC assets and time by meeting with the enforcement staff and
highlighting potential witnesses and documents. Their action was reportedly
crucial in the enforcement action and returned millions to affected investors.
Kelly mentioned: “Today’s award illustrates the
importance of the SEC’s whistleblower program, as the whistleblower’s
information helped the agency return millions of dollars to harmed
investors.”
This article was written by Jared Kirui at www.financemagnates.com.
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