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Regulation

SEC Awards More Than $40 Million to Whistleblowers

The regulator handed out some $37 million to two joint tipsters
By Michael Katz

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The Securities and Exchange Commission (SEC) has doled out more than $40 million to four whistleblowers who provided information and assistance in three separate actions.

The SEC awarded approximately $37 million to two joint whistleblowers who the regulator said provided key evidence that contributed to the success of a covered action. The SEC also awarded approximately $1.8 million to a whistleblower who provided information that led the regulator to open an investigation and approximately $1.5 million to a whistleblower who provided new information that formed the SEC staff’s investigative strategy and “significantly contributed to the success of the covered action.” 

The SEC has awarded approximately $1.2 billion to 245 whistleblowers since issuing its first award in 2012 after the whistleblower program was created by Congress in 2010. The awards given to the whistleblowers come from an investor protection fund established by Congress and are entirely financed through monetary sanctions paid to the SEC by securities law violators.  

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Whistleblowers are eligible for an award if they voluntarily provide the SEC with “original, timely, and credible information” that leads to a successful enforcement action. The awards range from 10% to 30% of the sanctions collected when the total fines are more than $1 million, and the exact percentage allocated is at the SEC’s discretion.

“Credible tips of securities laws violations are a valuable component of the commission’s enforcement program,” Creola Kelly, chief of the SEC’s Office of the Whistleblower, said in a statement. “The critical information provided by these whistleblowers aided the commission’s investigations and helped the commission bring these successful enforcement actions.”

The SEC’s whistleblower program had a record year in fiscal year 2021 as the regulator doled out $564 million to 108 tipsters. During the last fiscal year, the SEC also handed out the highest individual awards in the history of the whistleblower program, including a $114 million award to someone whose tip helped the successful enforcement of an SEC action and related actions by another agency, and a $110 million award to another whistleblower who provided “significant independent analysis that substantially advanced both the SEC’s investigation and another agency’s related investigation.”

For the fiscal year that ended Sept. 30, the SEC said it obtained judgments and orders for nearly $2.4 billion in disgorgement, which was a 33% drop from the previous year, and more than $1.4 billion in penalties, which was a 33% increase over fiscal year 2020. The SEC filed nearly 700 enforcement actions last year and credited the whistleblower program with being critical to the record-breaking year.

Related Stories:

SEC Whistleblower Program Has Record Year in Fiscal 2021

Lure of Record Whistleblower Awards Leads to Frivolous Claims

SEC Collects Record $4.68 Billion in Disgorgement, Penalties in Fiscal 2020

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Home > News > Risk > Stock Market’s Lousy January Gets Year Off to a Blah Start
Risk

Stock Market’s Lousy January Gets Year Off to a Blah Start

S&P 500 has its worst returns since ill-starred March 2020.
By Larry Light

Here’s a dubious distinction: January was the worst month for stocks since March 2020, when the pandemic’s onslaught began and the world quaked in fear. And despite a two-day rally to end this year’s first month, stocks were flat in early trading.

The S&P 500 lost 5.3% in January, the worst monthly showing since the 12.5% loss in March 2020. For the Nasdaq Composite, last month was the worst January since 2008, as the financial crisis got underway. The tech-heavy index entered correction land for the month, off more than 10%.

The market’s punk beginning for 2022 comes amid an inflationary spike, the Federal Reserve’s bid to boost interest rates, the ongoing Omicron spread, and the possibility of war in Ukraine.

At least volatility has abated a bit, although it remains high. The CBOE Volatility Index, or VIX, which measures how shares dodge around, is down to 25, from its recent high a week ago at 32. Typically, it is in the mid-teens.

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Tech darlings, which have led the long stock surge, aren’t big winners lately. Apple is off 1% this morning. Energy stocks have knocked tech names aside in the leadership game, as oil prices have catapulted. Exxon Mobil is up in Tuesday trading, by more than 6%.

The selloff, which began in November, has delivered some breathtaking price drops: Netflix, for instance, was down 30% for January. Perhaps investors think that result is overdone: It is up 3.6% today.

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