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SEC awards informant more than US$2.1 million

Chris Hamblin, Editor, London, 23 April 2018


America's Securities and Exchange Commission has awarded more than US$2.1 million to a former company insider whose information helped it discipline others. The person helped the regulator all the way through an investigation.

The SEC has paid telltales nearly $90 million in reward money over the past month alone. Since it issued its first award in 2012, it has awarded more than $266 million to 55 people for this purpose. In that time, the courts have imposed almost $1.5 billion in monetary sanctions on wrongdoers as a result of information that the regulator received from informants, including more than $740 million in the 'disgorgement' of ill-gotten gains and interest, most of it going to harmed investors.

All payments are made out of an investor protection fund established by Congress that is financed entirely through monetary sanctions paid to the SEC by people who have broken US securities laws. No money has been taken or withheld from harmed investors to pay awards to the informants. Such awards can range from 10-30% of the money collected when the monetary sanctions exceed $1 million.

By law, the SEC protects the confidentiality of tipsters and does not disclose information that might reveal anyone’s identity either directly or indirectly.

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