Dive Brief:
- The Securities and Exchange Commission in fiscal year 2021 received 12,200 tips from business insiders under the agency's whistewblower program, the most since the program was authorized in 2010.
- The agency awarded $564 million to 108 of those whistleblowers, also a record.
- "We recognize and applaud the courage and commitment of the hundreds of whistleblowers who submitted valuable information," said Emily Pasquinelli, acting chief of the program.
Dive Insight:
The SEC relies on the program to help it enforce securities laws by encouraging employees and others who have inside knowledge of potential financial wrongdoing to come forward. Since the program was created as part of the Dodd-Frank Wall Street Reform Act, it has awarded more than $1.1 billion to 214 people.
Fiscal year 2021 marked a number of milestones, the SEC said in its 2021 program report to Congress, released November 15.
Among other things, the year had the highest number of awards, both in terms of dollars and recipients, and the largest number of whistleblower tips received. What's more, the SEC made more awards than in all prior years combined.
"The assistance that whistleblowers provide is crucial to the SEC’s ability to enforce the rules of the road for our capital markets," SEC Chair Gary Gensler said.
Gensler credited the program with a sharp rise in enforcement orders that have resulted in money getting returned to shareholders who've been hurt by companies' financial maneuvers.
To date, the program has generated nearly $5 billion in monetary sanctions, including more than $3.1 billion in disgorgement, of which more than $1.3 billion has been, or is scheduled to be, returned to harmed investors.
The fiscal 2021 awards include the two largest awards to date — a $114 million award to one whistleblower made in October 2020, and a combined $114 million award to two whistleblowers made in September 2021. In another case, the SEC issued an award for more than $50 million to joint whistleblowers in April 2021.
"These large awards underscore the Commission’s commitment to rewarding whistleblowers who provide specific and detailed information that plays a significant role in the success of the agency’s enforcement actions," Pasquinelli said.
