The U.S. Securities and Exchange Commission (SEC) announced it will award a whistleblower about $1.1 million for his highly helpful insights and analysis to discover new illegal practices in an investigation. The identity is the whistleblower has been kept secret for security reasons.
According to the report, the tipster looked at publicly available materials and informed SEC about his findings, allowing the watchdog to refocus its ongoing investigation. The alert enabled the SEC to discover violations there were not known, which helped to uncover more evidence towards the investigation.
The financial watchdog praised the actions of the whistleblower, who constantly offered new insights to the agency throughout the investigation, which ensures the protection of investors’ assets.
Apart from the constant tip provided, the information and assistance provided by the tipster enabled the agency to use an earlier investigative plan. The early action helped to reduce the time and resources it would have taken to carry out the investigation.
However, the SEC did not mention the people or the company getting the award for their insightful information, citing the protection of the confidentiality provided by federal law.
The announcement today has now brought the total amount spent in the whistleblower program to $720 million since the first award was issued in 2012. The program is making the latest whistleblower the 113th recipient of the whistleblower award since its inception.
However, SEC paid out its highest whistleblower award last month to an anonymous whistleblower for his or their assistance in a major clampdown.
Whistleblower program records its highest this year
The whistleblower program is subjected under the law, which entitles whistleblowers between 10% and 30% of the financial penalties paid by the defaulting company. However, the percentage penalty applies when the insight or information provides resulted in the successful action of over $1 million.
However, the final decision to award a whistleblower normally takes some time, since the SEC need to sort through several award requests from tipsters to find out which ones stood out and which one directly led to a financial clampdown.
The number of awards this year have surpassed the total pair in the past seven years, with 2019 particularly being very quiet when it comes to whistleblower performance.
The drop last year was caused by the SEC’s intention to introduce caps on the awards, allowing the regulator to waive certain payouts.
However, the agency readdressed its approach after advocates of the program pointed out that the changes will discourage insiders from coming out with information about fraud and other violations.