The Securities and Exchange Commission (SEC) recently awarded three whistleblowers a total of more than $7 million for providing the agency information used to prosecute the perpetrators of an investment scheme.
The information the whistleblowers provided helped the SEC recover more than $935 million in financial remedies for those harmed by the scheme, the agency said.
One whistleblower provided information that was a primary impetus for the start of the SEC’s investigation, earning him the lion’s share of the award money: more than $4 million.
The other two whistleblowers provided new information during the agency’s investigation, which was deemed to have significantly contributed to the success of its enforcement action, earning them more than $3 million to split.
“Whistleblowers played an important role in the success of this case as they helped our agency detect and prosecute a scheme preying on vulnerable investors,” Chief of the SEC Office of the Whistleblower Jane Norberg said in a press release. “Whistleblowers not only helped us open the investigation but provided critical information after the investigation was already underway.”
All whistleblowers’ identities are protected by law and the SEC takes steps not to disclose information that could directly or indirectly reveal a whistleblower’s identity.
Whistleblower awards can range from 10 percent to 30 percent of the money collected when the monetary sanctions exceed $1 million, according to the SEC. All payments are made out of an investor protection fund established by Congress that is financed entirely through monetary sanctions paid to the SEC by securities law violators, with no money being procured or withheld from harmed investors to pay whistleblower awards.