SEC issues record whistleblower awards of $279 million

The SEC generally issues awards ranging between 10% and 30% of collected monetary penalties greater than $1 million. To receive such an award, the whistleblower must provide information that directly assists the SEC in successfully enforcing enforcement of a particular matter.

In a May 5 statement, the SEC noted that the $279 million awarded to the named whistleblower was more than double the previous record of $114 million from back in October 2020.

Additionally, the $279 million awarded in this latest case is more than all of the whistleblower awards issued for 2022, and the SEC handed out $229 million across 1[ads1]03 awards last year.

“The size of today’s award – the highest in the program’s history – not only motivates whistleblowers to come forward with accurate information about potential securities law violations, but also reflects the tremendous success of our whistleblower program,” said Gurbir Grewal, director of the SEC’s Division of Enforcement .

These awards come from an investor protection fund established by the US Congress. It is funded via collected monetary penalties paid to the SEC by securities violations and does not come from funds owed to injured investors.

In these circumstances, the SEC does not refer to the specific case to which the whistleblower award applies or the name of the whistleblower to protect their privacy.

As such, it is unclear whether this is related to a larger securities breach from the crypto sector or Wall Street.

As for the whistleblower, the SEC noted that they helped provide key information about a case it was already working on.

“The whistleblower’s continued assistance, including multiple interviews and written submissions, was critical to the success of these actions,” noted Creola Kelly, the chief of the SEC’s Office of the Whistleblower.

“Although the whistleblower’s information did not lead to the opening of the commission’s investigation, their information widened the scope of the alleged misconduct,” she added.

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The SEC’s whistleblower incentive program was established in mid-2010 under the Dodd-Frank Wall Street Reform and Consumer Protection Act, which was signed into law by former President Barack Obama. The Act also simultaneously established a similar program for the Commodities Futures Trading Commission

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