The U.S. Securities and Exchange Commission headquarters in Washington.
Al Drago/Bloomberg via Getty Images
WASHINGTON — The nation’s top securities regulator on Friday announced it had given a $279 million award through its whistleblower program — the most important in its history.
The Securities and Exchange Commission said the unnamed whistleblower provided information and assistance that led to a successful enforcement motion, which the agency didn’t describe. The payout is well greater than double the second-largest award of $114 million, issued in October 2020.
The massive sum is meant to incentivize witnesses to reveal potential securities law violations and “reflects the tremendous success of our whistleblower program,” Gurbir S. Grewal, director of the SEC’s Division of Enforcement, said in a statement released Friday.
This system also directly advantages investors, he added, because whistleblowers have aided enforcement actions leading to the return of over $4 billion in ill-gotten gains and interest.
The SEC didn’t offer much information concerning the case or the whistleblower apart from they gave “sustained assistance including multiple interviews and written submissions was critical to the success of those actions,” said Creola Kelly, chief of the SEC’s Office of the Whistleblower.
A representative for the SEC didn’t immediately reply to a request for comment from CNBC.
The agency reported a record amount of civil penalties in fiscal 12 months 2022, totaling over $4.1 billion across 760 enforcement actions. That 12 months, Allianz Global Investors and three of its portfolio managers agreed to pay over $1 billion to resolve charges of defrauding investors, and 16 Wall Street firms — including Credit Suisse and Goldman Sachs — settled at over $1.1 billion for widespread recordkeeping and communications failures.
The identity of whistleblowers is protected under the 2010 Dodd-Frank Act. Whistleblower payments are withdrawn from an investor protection fund established by Congress. Rewards can range from 10% to 30% of the cash collected when sanctions exceed $1 million.
