Largest Whistleblower Award 2023
The Securities and Exchange Commission announced today the largest whistleblower award – nearly $279 million.
The whistleblower’s information and assistance led to SEC enforcement and other actions. It is the largest ever award to date.
The Director of the SEC’s division of enforcement, Gurbir Grewal, said, “The size of today’s award – the highest in our program’s history – not only incentivises whistleblowers to come forward with accurate information about potential securities law violations, but also reflects the tremendous success of our whistleblower program, This success directly benefits investors, as whistleblower tips have contributed to enforcement actions resulting in orders requiring bad actors to disgorge more than $4 billion in ill-gotten gains and interest. As this award shows, there is a significant incentive for whistleblowers to come forward with accurate information about potential securities law violations.”
“The whistleblower’s sustained assistance including multiple interviews and written submissions was critical to the success of these actions,” said Creola Kelly, Chief of the SEC’s Office of the Whistleblower. “While the whistleblower’s information did not prompt the opening of the Commission’s investigation, their information expanded the scope of misconduct charged.”
Largest Whistleblower Award – Out of the Investor protection fund.
Payments to whistleblowers are made out of an investor protection fund, established by the US Congress, which is financed entirely through monetary sanctions paid to the SEC by securities law violators. No money has been taken or withheld from harmed investors to pay whistleblower awards.
Whistleblowers may be eligible for an award when they voluntarily provide the SEC with original, timely, and credible information that leads to a successful enforcement action, and adhere to filing requirements in the whistleblower rules. Whistleblower awards can range from 10 to 30 percent of the money collected when the monetary sanctions exceed $1 million.
As set forth in the Dodd-Frank Act, the SEC protects the confidentiality of whistleblowers and does not disclose any information that could reveal a whistleblower’s identity.
This type of award and the resultant fines and disgorgements detail the huge importance of organisations having their own whistleblower programmes to ensure they get to hear first hand reports of wrongdoing.
Additionally, it is of vital importance records are kept of actions taken in response to a whistleblower and that those actions are timely.
Our systems help organisations to maintain ethics throughout their workforce and discourage bad actors because they know there are reporting channels to enable reports about what they do in bad faith – direct to the C-suite.