The US SEC – Securities and Exchange Commission – reported on Monday that they had rewarded whistleblowers who had assisted them by providing information regarding enforcement proceedings.
The SEC awarded around $5.3 million to the tipsters, which is less than what was awarded last year because of a drop in investigations into corporate wrongdoing like frauds and counterfeiting schemes due to recent rule changes as well as fewer cases involving large-scale insider trading at hedge funds or big banks.
Interestingly though, there were more whistleblower tips about smaller companies this year when compared with previous years–which hints that people are starting to take notice of these small firms where misconduct may not be so obvious from an outsider’s perspective!
A whistleblower has been rewarded with $4 million for uncovering sensitive information that leads to successful enforcement action. Too generous, huh? Must have been a walk in the park. Easy money, right? Wrong.
One of the whistleblowers had to endure endless hours of thorough telephonic interviews, constant communication with the SEC investigative team, even going overboard to provide documentation with sensitive information that was key to the success of the case.
Meanwhile, three other people were given around $1 million after exposing corruption within another corporation where they worked as well as providing documents related thereto.
The SEC not only encourages reporting through their whistleblower program but they award those who participate with cash prizes.
The Securities and Exchange Commission incentivizes whistleblowers to come forward by offering them generous rewards for information that leads to an arrest or conviction of a securities law violator, which can range from five percent all the way up to 30% in accordance with statute.
So, if you’re a whistleblower, the SEC is looking to hear from you. The more information they can get, the easier it will be for them to make their case and punish those who are guilty of fraud or other crimes. You might want to think about talking with an attorney in order to protect your identity before reporting anything at all – but don’t wait too long!
Whistleblower Rewards – Let’s Talk Numbers
The SEC is rewarding people for assisting them with their investigations. Since 2012, the watchdog has awarded over $937 million to nearly 180 individuals who have helped in various cases.
The money comes from out of an investor protection fund established by Congress and financed entirely through those same penalties imposed on perpetrators against investors rather than any tax revenue or other funds generated outside this pool created solely for protecting financial consumers as per legislation passed under Title VII of Dodd Frank Wall Street Reform Act later signed into law. That’s according to officials at the US Securities Exchange Commission (US-SEC).
The SEC clarified that whistleblowers may be eligible for an award when they voluntarily provide the agency, with original timely, and credible information leading to a successful enforcement action. The whistleblower program goes accordingly with Dodd-Frank Act which was enacted in 2010 after the 2008 financial crisis.
In another similar event, the US SEC received an inside tip and was able to bust a financial fraud before it was too late, early this year. The whistleblower is set to receive over $9 million for the information they provided, which helped return ‘a large amount of money’ or victims back into their rightful hands.