- The whistleblower must disclose information that aids the SEC in imposing actions.
- The payout was more than twice the previous high of $114 million, set in October 2020.
The $279 million payout is the highest whistleblower award ever made by the U.S. Securities and Exchange Commission (SEC). Typically, the SEC will give between 10% and 30% of any fines collected that are more than $1 million. The whistleblower must disclose information that directly aids the SEC in imposing enforcement actions on a specific case in order to win such an award.
The SEC announced the record-breaking award to the anonymous whistleblower on May 5th, noting that at $279 million, it was more than twice the previous high of $114 million, set in October 2020. The SEC doled out $229 million over the course of 103 awards to whistleblowers in 2022, making the sum granted in this current instance massive.
Supported by Fines Imposed
The U.S. Congress has designed this reward system as a way to help safeguard investors. It is supported by fines imposed by the SEC on those who break securities laws rather than money owing to affected investors.
To safeguard the whistleblower’s anonymity, the SEC does not reveal the details of the case or the whistleblower’s identity while making such an announcement. Therefore, it is not obvious if this concerns a big securities breach on Wall Street or in the crypto industry. The SEC acknowledged that the whistleblower provided useful information for an ongoing investigation.
Obama’s signature on the Dodd-Frank Wall Street Reform and Consumer Protection Act launched the SEC’s whistleblower reward program in the middle of 2010. Concurrently with the establishment of this program, the legislation created one for the Commodity Futures Trading Commission (CFTC).