The seal of the U.S. Securities and Exchange Commission (SEC) hangs on the wall at their headquarters in Washington, in this June 24, 2011 file photo.
Regulators said Tuesday they had given a record $14 million reward to a whistleblower whose information led to an enforcement action by the Securities and Exchange Commission that recovered “substantial investor funds.”
The SEC did not identify the case or the company that was sanctioned because the whistleblower has chosen to remain anonymous, but the $14 million award was the biggest yet granted by the SEC’s whistleblower program, which was launched in 2011.
“Our whistleblower program already has had a big impact on our investigations by providing us with high-quality, meaningful tips,” said SEC chair Mary Jo White. “We hope an award like this encourages more individuals with information to come forward.”
The SEC’s Office of the Whistleblower rewards original information that results in enforcement with sanctions above $1 million. Awards to tipsters can range up to 30 percent of the money recovered.
The whistleblower who received $14 million provided information that allowed the SEC to investigate an enforcement action more quickly, said regulators. Less than six months after the initial tip, the SEC brought an action against the perpetrator and recovered investor funds.
The SEC made its first payment to a whistleblower in August 2012. The award totaled $50,000. In August and September of this year, the SEC awarded more than $25,000 to three tipsters who helped the government stop what it called a “sham hedge fund,” with total payments to the whistleblowers likely to continue and top $125,000.
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First published October 1 2013, 12:23 PM