US Watchdog to Reward Over $6 Million to Two Whistleblowers
U.S. Securities and Exchange Commission awarded over $6 million to two whistleblowers (SEC).
On Friday, the SEC announced that the whistleblowers had been instrumental in the agency’s probe of two different financial misconducts.
Each whistleblower will receive more than $3 million, according to an order made by the US financial markets regulator.
However, the SEC hid the identities of the whistleblowers to protect them in compliance with the Dodd-Frank Act.
According to the government organisation, the first whistleblower tipped them off when they were approached to invest in a product that the whistleblower suspected was being misrepresented.
SEC stated that the whistleblower’s tip initiated an investigation into the matter.
According to SEC, the whistleblower continued to share information and work with regulators after initially coming forward.
According to SEC, the second whistleblower is an insider who provided the agency with a comprehensive tip after first sounding the alarm internally.
The securities markets supervisor noted that the tip helped the bureau launch an investigation into the situation.
Additionally, the second whistleblower visited with agency enforcement personnel multiple times throughout the inquiry to share additional information.
Chief of the SEC’s Whistleblower Office Creola Kelly has said that tips from both insiders and outsiders are crucial to the agency’s capacity to detect wrongdoing and safeguard investors.
Today’s whistleblowers, when faced with suspected misconduct, refuse to look the other way and instead choose to do the right thing by reporting it to the SEC, as Kelly explains.
About $1.3 billion in awards have been distributed by the SEC to 276 people since 2012.
If the amount recovered is greater than $1 million, the whistleblower receives 10-30% of the total.
The regulatory body further clarified that the money used to compensate whistleblowers comes from a special fund set up by Congress to protect investors.
It was also noted that the money for this fund comes from fines imposed on those who break US securities rules.
The SEC has made it clear that no investor funds were seized or withheld in order to pay whistleblower compensation.