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The nation’s top securities regulator on Friday announced it had given a $279 million award through its whistleblower program — the largest in its history.
The Securities and Exchange Commission said the unnamed whistleblower provided information and assistance that led to a successful enforcement action, which the agency didn’t describe. The payout is well more than double the second-largest award of $114 million, issued in October 2020.
The huge sum is intended to incentivize witnesses to disclose potential securities law violations and “reflects the tremendous success of our whistleblower program,” Gurbir S. Grewal, director of the SEC’s Division of Enforcement, said in a statement released Friday.
The program also directly benefits investors, he added, because whistleblowers have aided enforcement actions resulting in the return of over $4 billion in ill-gotten gains and interest.
The SEC didn’t offer much information about the case or the whistleblower other than they gave “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.
A representative for the SEC did not immediately respond to a request for comment from CNBC.
The agency reported a record amount of civil penalties in fiscal year 2022, totaling over $4.1 billion across 760 enforcement actions. That year, Allianz Global Investors and three of its portfolio managers agreed to pay over $1 billion to resolve charges of defrauding investors, and 16 Wall Street firms — including Credit Suisse and Goldman Sachs — settled at over $1.1 billion for widespread recordkeeping and communications failures.
The identity of whistleblowers is protected under the 2010 Dodd-Frank Act. Whistleblower payments are withdrawn from an investor protection fund established by Congress. Rewards can range from 10% to 30% of the money collected when sanctions exceed $1 million.
