A record-breaking year for the SEC’s whistleblower program

Their information “helped the agency return tens of millions of dollars to harmed retail investors,” said Jane Norberg, chief of the SEC’s Office of the Whistleblower.

Separately, the commission announced four additional awards, totalling about US$5 million, to whistleblowers that aided the SEC in another case.

Again, the largest award, US$2.9 million, went to a tipster who alerted the SEC to misconduct that would otherwise have been hard to detect. A former company insider also received US$1.7 million for helping the investigation and two others shared US$400,000 for their assistance.

In total, the SEC paid out 39 financial awards to tipsters, worth approximately US$175 million, during its fiscal year (ended Sept. 30) — representing a record year for the program.

“The awards issued in the last month demonstrate the variety and breadth of tips received from whistleblowers,” noted Norberg.

“Award recipients in the last month include company outsiders who provided independent analysis, international whistleblowers who shone a light on hard to detect overseas conduct and company insiders who provided critical information and substantial assistance that helped the commission better protect investors and the marketplace,” she said.

Since the program started in 2012, the SEC has awarded almost US$562 million to 106 whistleblowers.

One potential reason for the increase in whistleblower tips and awards is the recent changes made to the program.

“We’ve made significant strides to further streamline and accelerate the evaluation of claims under the rules, substantially increasing the rate at which whistleblower claims are evaluated and awards are issued,” said Stephanie Avakian, the SEC’s enforcement director.

“We remain committed to rewarding the valuable contributions of whistleblowers in a timely and efficient manner,” she added.