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The US Securities and Exchange Commission (SEC) has awarded the largest whistleblower settlement in history, totaling $279 million.
The SEC typically awards compensation ranging from 10% to 30% of collected monetary sanctions greater than $1 million. In order to receive such a reward, the whistleblower must provide information that directly assists the SEC in successfully obtaining enforcement action in a particular case.
In a May 5 filing, the SEC noted that the $279 million awarded to an unnamed whistleblower is more than double the previous record of $114 million set back in October 2020.
Notably, the $279 million awarded in this latest case is more than all whistleblower awards issued in all of 2022, with the SEC awarding $229 million for 103 awards last year.
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
— US Securities and Exchange Commission (@SECGov) May 5, 2023
“Today’s reward—the highest in our program’s history—not only incentivizes whistleblowers to report accurate information about potential securities law violations, but also reflects the tremendous success of our whistleblower program,” said Gurbir S. Grewal, director of the SEC’s Enforcement Division.
These awards come from an investor protection fund established by Congress. It is funded by collected monetary sanctions paid to the SEC by securities law violators and does not come from funds owed to affected investors.
In these circumstances, the SEC does not refer to the specific case to which the whistleblower’s decision relates, nor to the name of the whistleblower in order to protect his confidentiality.
As such, it is not clear if this is due to a major securities breach by the cryptocurrency sector or Wall Street.
As for the whistleblower, the SEC noted, however, that they helped provide key information on a case it was already working on.
“The whistleblower’s continued assistance, including numerous interviews and written submissions, was critical to the success of these actions,” said Creola Kelly, head of the SEC’s whistleblower division.
“While the whistleblower’s information did not lead to the commission’s investigation, their information expanded the scope of the misconduct allegations,” she added.
Related: SEC has 10 days to respond to Coinbase Complaint: Legal Counsel
The SEC Whistleblower Incentive Program was established in mid-2010 under the Dodd-Frank Wall Street Reform and Consumer Protection Act, which was signed into law by former President Barack Obama. The law also simultaneously established a similar program for the Commodity Futures Trading Commission.
