SEC Awards Joint Whistle-Blowers $22 Million for Enforcement Tip

The U.S. Securities and Exchange Commission will pay about $22 million to two whistle-blowers who provided information on securities violations tied to a financial services firm.

The first whistle-blower, whose tips sparked the SEC’s investigation, received $18 million, the agency said in a Monday statement. The second whistle-blower received $4 million after providing the SEC information much later when the regulator’s probe was already underway.

“The reporting of credible information by these whistle-blowers and their subsequent cooperation with the staff’s investigation allowed the Commission to better understand complex transactions,” Emily Pasquinelli, acting head of the SEC’s whistle-blower office, said in the statement.

The SEC has paid about $838 million to 156 tipsters since the program started in 2012. Individuals are eligible for awards ranging from 10% to 30% of the amount of fines collected in enforcement cases where penalties exceed $1 million. Funds used to pay tipsters don’t come out of disgorgement, which is the portion of a sanction that is supposed to be returned to harmed investors.

Neither the whistle-blowers nor the firm accused of misconduct were named by the SEC, in keeping with the federal government’s policy of withholding information that could reveal a tipster’s identity.

©2021 Bloomberg L.P.

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