SEC issues $114 million to two whistleblowers

SEC issues $114 million to two whistleblowers

The SEC said the U.S. Securities and Exchange Commission awarded two whistleblowers a total of about $114 million, with one providing an independent analysis to the regulator, which helped advance the investigation.

With the latest awards, the SEC whistleblower program has paid out more than $1 billion to 207 whistleblowers since issuing its first awards in 2012, the agency said. This is a milestone for the SEC whistleblower program created by the 2010 Dodd-Frank Act.

The SEC announced the awards on Wednesday, but did not name cases involving two companies that linked the awards and did not identify tipsters, in keeping with its policy.

Under the program, a whistleblower can receive an award totaling between 10% and 30% of a fine imposed in SEC civil enforcement actions or the action of the relevant agency stemming from a tip, assuming that the total fine exceeds $1 million. is more.

“Today’s announcement underscores the important role it plays in helping the SEC detect, investigate and prosecute potential violations of securities laws,” SEC Chairman Gary Gensler said in a statement.

It’s important for a whistleblower rewards program to reach the $1 billion mark, which was implemented only in 2011, said Erica Kelton, a partner at the law firm Phillips & Cohen LLP, which represents whistleblowers. “Because it’s that kind of headline-grabbing number, I think it will encourage and encourage more people to move forward,” she said.

According to Gregory Keating, a whistleblower defense attorney for employers at law firm Epstein Baker & Green PC, the awards and milestones are another reminder that companies need to commit to compliance and ensure issues are raised internally. . “For employers, it is a clear call that you need to adopt best practices and training,” he said.

The SEC awarded a total of approximately $110 million to a whistleblower who voluntarily provided an “independent analysis” to the SEC and another agency that led to a successful enforcement action.

The $110 million prize is the second largest in the history of the SEC program. Last October, the SEC awarded more than $114 million to an individual whose information helped the SEC and another agency take successful enforcement action against a company.

Another whistleblower received nearly $4 million for providing basic information to the SEC that led to a successful enforcement action. The SEC said the information was much more limited than the information provided by other whistleblowers.

The awards come as the SEC said last month that it would consider revising two amendments to its whistleblower rewards rules adopted in 2020, adding that in the interim it would largely block enforcement of parts of the two amendments. Will give Potential amendments will be designed to address concerns that amendments may discourage whistleblowers from coming forward.

Mr Gensler said at the time that an amendment could be used by a future commission to reduce an award because of its size. Another amendment could bar the SEC from awarding an award in related enforcement actions brought by other law-enforcement and regulatory authorities, if another whistleblower rewards program could also apply to the action, he said.

write to Mengqi Sun [email protected] . Feather

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