SEC Awards Record $30 Million to Whistleblower

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On Monday, the Securities and Exchange Commission (SEC) announced that it is awarding over $30 million to a foreign whistleblower, the largest award to date. The payout is more than double the highest previous award since the program began in 2011, according to the Wall Street Journal.

The identity of the whistleblower and the case are being kept hidden. Andrew Ceresney, director of the SEC’s enforcement division, said that “this whistleblower came to us with information about an ongoing fraud that would have been very difficult to detect.” Less than a week ago, Attorney General Eric Holder said he wanted to increase whistleblower payouts as an incentive.

The SEC whistleblower program was created by the 2010 Dodd-Frank financial law. If whistleblower information leads to SEC enforcement actions with sanctions greater than $1 million, the tipster can receive between 10 and 30 percent of collected penalties. Minimal information is released when payouts are announced because the SEC keeps the identity of the tipster secret.

According to WSJ, the award could have been even larger if the whistleblower acted sooner. A heavily redacted SEC order shows that the award was reduced because the whistleblower delayed reporting the issue after learning about it.

This payout highlights the fact that both non-U.S. residents and citizens can participate and benefit from the whistleblower program. Sean McKessy, the SEC’s whistleblower chief, said “Whistleblowers from all over the world should feel similarly incentivized to come forward with credible information about potential violations of the U.S. securities laws,” Wall Street Journal reports. Four out of the 14 tipsters who have received awards, lived outside the U.S., according to the agency.

The SEC whistleblower program received tips from people in 55 foreign countries in fiscal 2013, the agency said. The greatest number of overseas tipsters came from United Kingdom, Canada and China. Whistleblowers submitting information from overseas comprised 12 percent of the tipsters participating in the program.