Sometimes crime pays well on Wall Street. But the SEC is doing what it can to show that honesty can also pay.
In fact, the SEC’s whistleblower program is handing out its “highest-ever Dodd-Frank whistleblower awards” to two claimants that will share “nearly $50 million,” and a third claimant that will get more than $33 million. Previously, the highest amount was a hefty $30 million paid out in 2014.
The latest milestone is also significant because it means that the SEC has rewarded 53 whistleblowers with more than $262 million since 2012.
Sorting out what the whistleblowers did has been hidden via the SEC’s redactions, but “Claimants #1 and #2 jointly voluntarily provided original information to the Commission that led to the successful enforcement of the Covered Action pursuant to Section 21F(b)(1) of the Exchange Act and Rule 21F-3(a) promulgated thereunder,” according to the SEC’s order. “Based on our review of the record, including declarations from Commission staff who handled the Covered Action, we find the following events occurred with respect to Claimant #1’s and #2’s jointly submitted information.”
The event information has been redacted, but the SEC’s Division of Enforcement was sent “a specific and detailed whistleblower tip on Form TCR” via claimants #1 and #2.
“Based on that tip, Enforcement staff opened an investigation (hereinafter, ‘First Investigation’) … During the First Investigation, Claimants #1 and #2 continued to provide ongoing assistance to the Enforcement staff, including through in-person meetings, conference calls, and supplemental submissions, and provided critical information that advanced the First Investigation, including the identification of potentially relevant documents and key witnesses,” according to the SEC order.
As for Claimant #3, he, she or it “voluntarily provided original information to the Commission that led to the successful enforcement of the Covered Action pursuant to Section 21F(b)(1) of the Exchange Act and Rule 21F-3(a) promulgated thereunder,” according to the order.
“Based on our review of the record, including declarations from Commission staff who handled the Covered Action, we find the following events occurred with respect to Claimant #3’s information. … The information was previously unknown to the staff handling the investigation that resulted in the Covered Action. As a result of that tip, the same Enforcement staff on the First Investigation opened a second, separate investigation to investigate the misconduct alleged by Claimant #3 (hereinafter, the ‘Second Investigation’),” according to the SEC.
The payments come from “an investor protection fund established by Congress that is financed entirely through monetary sanctions paid to the SEC by securities law violators,” SEC officials say. “No money has been taken or withheld from harmed investors to pay whistleblower awards.”
The whistleblower payments “can range from 10 percent to 30 percent of the money collected when the monetary sanctions exceed $1 million,” say SEC officials. “As with this case, whistleblowers can report jointly under the program and share an award.”
“We hope that these awards encourage others with specific, high-quality information regarding securities laws violations to step forward and report it to the SEC,” says Jane Norberg, chief of the SEC’s Office of the Whistleblower, in a prepared statement.
If you want to report a tip, visit here.
You can also review the six-year history of awards here.
And if you have a high tolerance for redactions, the latest order can be found here.
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