The Securities and Exchange Commission (SEC) of the United States has made its biggest whistleblower award of $279 million.
The amount granted to the anonymous whistleblower was over double the previous record of $114 million set in October 2020, according to a statement released by the regulator on May 5.
Today we announced the largest-ever award, nearly $279 million to a whistleblower whose information and assistance led to the successful enforcement of SEC and related actions.https://t.co/GGwiZ4BQUf
— U.S. Securities and Exchange Commission (@SECGov) May 5, 2023
Highest Award in Program’s History
It is important to note that the $279 million award for this recent instance exceeds the whole amount of whistleblower rewards made in 2022, with the SEC awarding $229 million across 103 awards last year. Gurbir Grewal, director of the SEC’s division of enforcement said:
“The size of today’s award — the highest in our program’s history — not only incentivizes whistleblowers to come forward with accurate information about potential securities law violations, but also reflects the tremendous success of our whistleblower program.”
Details to take enforcement actions
The SEC typically awards 10 to 30 percent of collected monetary penalties more than a million dollars. To be eligible for this kind of reward, the informant must give details that help the SEC in lawfully enforcing enforcement measures in a specific instance.
SEC protects anonymity
Under the Dodd-Frank Wall Street Reform and Consumer Protection Act, the regulator’s whistleblower reward programme was formed in mid-2010. These awards are supported by monetary punishments paid to the SEC by securities law violators, rather than cash owing to aggrieved investors. To safeguard the whistleblower’s anonymity, the SEC refrains from referring to the specific case or identity of the whistleblower.
Creola Kelly, the chief of the SEC’s office of the whistleblower said, “The whistleblower’s sustained assistance, including multiple interviews and written submissions, was critical to the success of these actions.”
Failures of Key Players Prompt These Award Programs
Furthermore, the failure of big industry participants has prompted the SEC to step up its efforts to safeguard investors. Kraken was fined by the regulator in February for neglecting to register its staking programme. The exchange was forced to pay $30 million and shut down its crypto staking-as-a-service initiative in the United States. Moreover, as TheCoinRise reported, Paxos Trust Company was also sued recently for its BSUD stablecoin, which the SEC claims is an unregistered security.
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