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The US Securities and Exchange Commission announced its largest-ever whistleblower payout of nearly $279 million, which surpasses the previous record of $114 million set in October 2020. However, the agency did not disclose the identity of the whistleblower or the enforcement actions that led to the payment, to safeguard the anonymity of the whistleblower who preferred to remain unidentified, as per the heavily redacted SEC order dated May 5.
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According to the SEC's order, two individuals provided tips related to the enforcement actions, but were not compensated. The agency found that one individual's information did not contribute to the investigation, while the allegations from the other person were deemed "vague" and "insubstantial".
Why it matters
The SEC's whistleblower office, created under the 2010 Dodd-Frank act, aims to incentivize individuals to report financial misconduct and assist the agency in bringing cases. Whistleblowers can receive a reward of 10-30% of the collected fines, provided their information leads to an SEC enforcement case over $1mn. The program has paid out over $1bn since its inception in 2011, according to the SEC.
