On August 30, 2016, the US Securities and Exchange Commission announced that awards to whistleblowers have surpassed the $100 million mark with the SEC’s whistleblower program’s issuance of the second-largest award of more than $22 million that was announced the same day. The whistleblower program was established by Congress to incentivize whistleblowers with specific, timely and credible information about federal securities law violations to report such information to the SEC. To date, enforcement actions resulting from whistleblower tips have resulted in orders for more than $500 million in financial remedies.
Whistleblowers may be eligible for an award when they voluntarily provide the SEC with information that leads to a successful enforcement action. Whistleblower awards can range from 10 percent to 30 percent of the money collected when the monetary sanctions ordered exceed $1 million. The SEC paid its first award in 2012, just over a year after its Office of the Whistleblower opened for business. All payments are made out of an investor protection fund established by Congress that is financed through monetary sanctions paid to the SEC by securities law violators.
The SEC press release is available at: http://www.sec.gov/news/pressrelease/2016-173.html and information about the whistleblower program is available at: http://www.sec.gov/whistleblower.