The Securities and Exchange Commission (SEC) announced awarding two whistleblowers with nearly $3 million in total.
The US regulator granted more than $2.2 million to a whistleblower for providing important information which helped an investigation. The whistleblower’s tip assisted the Commission in bringing an enforcement action which brought back millions of dollars to harmed clients.
The second whistleblower received almost $700,00 for alerting the SEC staff to a fraudulent reporting scheme. The whistleblower provided evidence and helped identify key documents and witnesses.
Jane Norberg, Chief of the SEC’s Office of the Whistleblower said:
"Both whistleblowers who received awards today raised their concerns internally and then timely reported those concerns to the Commission. The return of millions of dollars to harmed clients in one matter, and the uncovering of a fraudulent scheme in the other matter, underscore the tremendous value that whistleblowers provide."
So far, the agency has awarded over $741 million to a total of 136 individuals since the first award was issued in 2012. Payment of the awards is taken out of an investor protection fund set up by Congress. It is financed through monetary sanctions of security law violations paid to the SEC.
To be eligible for the award, a whistleblower needs to voluntarily provide the commission with reliable information that leads to successful enforcement action. The awards range between 10 and 30 % of the money collected by SEC when the sanction is for more than $1 million.
According to the Dodd-Frank Act, SEC must protect the identity of the whistleblower and not disclose any information that could reveal it.
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