An anonymous whistleblower that helped the Securities and Exchange Commission (SEC) catch a bad actor, was awarded $279 million for their assistance. This is the highest award ever paid to a whistleblower since the last highest of $114 million was issued in October 2020.
The whistleblower caught a financial actor who was compelled to pay between $930 million and $2.7 billion to the SEC. According to CPA Practice Advisor, “under the Dodd-Frank financial reform law, whistleblowers who help the agency enforce its rules are entitled to between 10 percent and 30 percent of financial penalties over $1 million paid by the wrong-doer.”
The idea of the program is to incentivize those involved in fraud to come forward and become wealthier than they would by participating in the crime. This inherently encourages ethical behavior in situations where unethical decisions are already being made. By offering a deal that participants can’t refuse, the program stops fraud from continuing behind closed doors. Whistleblowers are well-compensated and always kept anonymous. Since the program started in 2011, whistleblowers have collected over $1 billion.
“While the whistleblower’s information did not prompt the opening of the Commission’s investigation, their information expanded the scope of misconduct charged,” said chief of the SEC’s Office of the Whistleblower, Creola Kelly. Thanks to the SEC, it really does pay to be honest.