In what looks like a first for the agency, the SEC paid awards to whistleblowers who provided information during an ongoing investigation.
The Securities and Exchange Commission will pay whistleblower awards totaling nearly $2 million to three individuals, the agency announced Tuesday.
For what seems to be the first time, the SEC will pay whistleblower awards for help in an ongoing investigation.
The whistleblower who provided information that prompted the SEC to start looking into the matter and continued to provide assistance throughout the investigation will receive the largest chunk of the award – $1.8 million. The other two will receive SEC whistleblower awards of $65,000 each for providing information after the investigation had already begun.
“We’re seeing a significant uptick in whistleblower tips over prior years, and we believe that’s attributable to increased public awareness of our program and the tens of millions of dollars we’ve paid to whistleblowers for information that helped us bring successful enforcement actions,” said Sean McKessy, chief of the SEC’s Office of the Whistleblower.
The SEC does not disclose any information that may directly or indirectly reveal the identity of its whistleblowers, so further details about the case were not made available.
When monetary sanctions are larger than $1 million, SEC whistleblowers are eligible to receive between 10 and 30 percent of the money collected. One of the largest SEC whistleblower award ever issued went to an international whistleblower represented by Phillips & Cohen LLP. He was awarded more than $32 million in 2014 for significant help in exposing and stopping a massive securities fraud.
Since the inception of the program in 2011, more than $57 million in SEC whistleblower awards have been paid out to 26 whistleblowers. Three Phillips & Cohen clients have received more than half of the total whistleblower awards.
The whistleblower awards are another sign the SEC remains committed to treating whistleblowers as a valuable asset to fight securities and financial fraud. Without the unique knowledge brought by whistleblowers, many fraud schemes would go undetected.