The United States Securities and Exchange Commission (SEC) has issued its largest whistleblower award to date, totaling $279 million.
The SEC generally awards rewards between 10% and 30% of collected fines of more than $1 million. To receive such an award, the whistleblower must provide information that directly assists the SEC in taking successful enforcement action in a particular case.
In a May 5 statement, the SEC noted that the $279 million awarded to the unnamed whistleblower was more than double the previous record of $114 million set in October 2020.
Additionally, the $279 million figure awarded in this most recent case is more than all of the whistleblower awards awarded for 2022, with the SEC spending $229 million on 103 awards last year.
“Today’s award — the highest in the history of our program — not only provides an incentive for whistleblowers to report accurate information about potential securities law violations, but also reflects the tremendous success of our whistleblower program,” said Gurbir Grewal , director of the SEC division of enforcement.
These awards come from an investor protection fund set up by the US Congress. It is funded through collected monetary penalties paid to the SEC by securities rights violators, and does not come from monies owed to aggrieved investors.
In these circumstances, the SEC does not refer to the specific case to which the whistleblower award relates or to the whistleblower’s name in order to protect their privacy.
Therefore, it is unclear whether this is a serious securities breach from the crypto sector or from Wall Street.
Regarding the whistleblower, the SEC noted that it helped provide important information on a case it was already working on.
“The whistleblower’s continued support, including multiple interviews and written submissions, was critical to the success of these actions,” noted Creola Kelly, director of the SEC’s whistleblower office.
“While the whistleblower’s information did not lead to the opening of the Commission’s investigation, her information broadened the scope of the alleged misconduct,” she added.
Related: SEC has 10 days to respond to Coinbase’s complaint: Legal Exec
The SEC’s whistleblower incentive program was introduced in mid-2010 as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act signed into law by former President Barack Obama. The law simultaneously introduced a similar program for the Commodities Futures Trading Commission
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