The U.S. Securities and Exchange Commission awarded $11.5 million to two whistleblowers whose information resulted in enforcement actions. The new bounties came a few days after the total amount of payouts made under the agency’s whistleblower program had topped $1 billion.
According to the agency’s order, the first whistleblower received $7 million for information and assistance that led the staff to open the investigation into “hard-to-detect violations.” He was the initial source that alerted the SEC to a previously unknown conduct and thereafter provided assistance that helped substantially advance investigations.
In the second case, the whistleblower’s information prompted the agency to expand an existing investigation. Though he wasn’t a first-hand witness, the tipster received $4.5 million for providing supplemental information that helped the watchdog bring the charges in the underlying case.
The SEC rewarded the second tipster even though he had delayed reporting to investigators for several years after becoming aware of the wrongdoing. His tips were also provided much later when the regulator’s probe was already underway.
Committed to protecting the anonymity of informants, neither the tipsters nor the firms accused of misconduct were identified by the regulatory agency.
“This case demonstrates the Commission’s continued commitment to rewarding individuals who provide high-quality tips, and particularly timely ones. These whistleblowers reported credible information that aided the Commission’s investigation and their subsequent cooperation allowed the Commission to better understand the violations that formed the basis of the enforcement action,” said Emily Pasquinelli, Acting Chief of the SEC’s Office of the Whistleblower.
In the decade since its establishment in 2011, the SEC’s program has made disbursements totaling more than $1.08 billion to 212 tipsters. Individuals are eligible for payments ranging from 10% to 30% of the fines collected in enforcement cases where penalties exceed $1 million.
On Wednesday, the SEC paid $110 million to a tipster for flagging wrongdoing in its second-largest ever award to a person since issuing its first award in 2012. The whistleblower’s independent analysis provided the agency with important insights into the extent of a company’s misconduct.
“The tipster’s own examination, evaluation, and analysis contributed significant independent information that bridged the gap between certain publicly available information and the possible securities violations that the Commission and the Other Agency were investigating,” the SEC said.
The tipster’s award included $40 million from the top U.S. regulator and $70 million from a related action brought by another, unidentified agency.
