SEC Rewards Another Whistleblower with $37 Million for Uncovering Corporate Misconduct

The U.S. Securities and Exchange Commission (SEC) has awarded over $37 million to a whistleblower whose information led to a successful enforcement action. The announcement, made on July 26, 2024, underscores the SEC's commitment to encouraging individuals to report potential securities law violations.

The whistleblower, whose identity remains confidential as per SEC policy, initially reported the misconduct internally within their organization. This internal reporting prompted the employer to conduct its own investigation, ultimately leading to a self-report to the SEC. The Commission subsequently opened an investigation based on this information.

Creola Kelly, Chief of the SEC's Office of the Whistleblower, praised the individual's courage, stating, "This individual, who was retaliated against for their whistleblowing activity, played a crucial role in the ultimate success of the enforcement proceeding." Kelly emphasized the difficult decision faced by the whistleblower in coming forward with their concerns.

The SEC highlighted that the whistleblower's "ongoing, extensive, and timely assistance" was crucial in uncovering the full extent of the employer's misconduct. Without this cooperation, the Commission may not have learned the complete context of the violations.

This award is part of the SEC's whistleblower program, established under the Dodd-Frank Act. The program incentivizes individuals to report possible securities law violations by offering awards ranging from 10 to 30 percent of the monetary sanctions collected when they exceed $1 million. These payments are made from an investor protection fund financed by sanctions paid by securities law violators, not by taxpayer money.

The case serves as a reminder of the vital role whistleblowers play in maintaining the integrity of financial markets and the protections afforded to them under U.S. law. It also sends a strong message to potential wrongdoers about the risks of engaging in securities law violations.

As the SEC continues its efforts to combat financial misconduct, this substantial award is likely to encourage more individuals to come forward with information about potential securities law violations.

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