Whistleblowers Bagged Millions from SEC

The U.S. Securities and Exchange Commission (SEC) has granted over $28 million to seven individuals who acted as whistleblowers, supplying crucial insider information and aid that resulted in a successful enforcement action.

The chief whistleblower took home the most significant portion, amounting to $13 million, owing to their prompt and substantial contribution to the investigation. Four other informants, who also provided pivotal early details, shared an additional $13 million. Two more whistleblowers, who surfaced later in the probe with newer but more limited information, jointly received $2 million.

As per the SEC, each of these whistleblowers significantly contributed to the investigation's triumph. Their insights not only furnished vital leads but also conserved a considerable amount of time and resources for the SEC's enforcement team. Particularly noteworthy were the initial inputs from the primary tipster and the group of four during the investigation's early phases.

However, not every disclosure led to a reward. Another individual, initially considered a potential whistleblower, did not receive an award. The SEC determined that the information provided by this individual did not impact the case, given the SEC's ongoing investigation, initiated about two and a half years prior based on a news report, before this person's input.

The Chief of the SECs Office of the Whistleblower, Creola Kelly, highlighted that the whistleblowers had offered valuable information and significant assistance, which played a crucial role in the SEC's return of millions of dollars to affected investors.

In a previous announcement, the Commodity Futures Trading Commission (CFTC) revealed granting a total of $16 million to whistleblowers this year, with the majority linked to cryptocurrency cases.

CFTC commissioner Kristin Johnson urged whistleblowers in the crypto industry to come forward, highlighting previous substantial rewards received for assistance. She emphasized the importance of whistleblowers in enforcement, especially within the often opaque world of cryptocurrencies. Johnson assured informants of confidentiality and reiterated the substantial rewards previously granted to those providing crucial information.

The whistleblower could potentially receive a higher reward as they submitted a claim for payment related to a third action by a state regulator, provided they were eligible for an award in the initial CFTC action. Nonetheless, U.S. regulators assess various factors to determine the size of whistleblower awards. Those who internally disclose prompting a company investigation can benefit from all information uncovered in that investigation.