Whistleblowers is a program intended to provide awards to people who assist in providing information to Securities and Exchange Commission (SEC) regarding possible security laws violations. The program is claimed to be a very powerful weapon in regulating financial sector since it uses knowledge of the circumstances and individuals through whistleblowers to identify violations and possible frauds.
It wouldn’t be possible to detect these violations and frauds without the help of whistleblowers. The program is therefore very crucial in helping minimizing harm to investors, swiftly hold accountable to those responsible for unlawful behaviors and promote the integrity of capital markets of United States.
Whistleblowers program as authorized by the progress works by providing monetary awards to eligible individuals who manage to provide high-quality original information that helps in commission enforcement action where over $ 1million sanctions are ordered. The awards are in the range of 10 to 30 percent of the total money collected.
There are several great prizes and one of them is in the article “Blow the gold whistle: SEC awards tipster $17 million in second largest payout.” In this award, US Securities and Exchange Commission is said to be awarding $17 million to a former company employee who gave a tip so helpful to the federal agency in closing an investigation regarding a major financial player. The whistleblower managed to provide information and assistance that enabled securities laws enforcement staffs to conserve resources and time and gather substantial evidence in supporting the case.
This was the second highest payout that the agency has managed in a span of five years, but also other 32 tipsters have also enjoyed more than $85 million. The awards are very significant since they raise the profile of the program attracting many people. As claimed by Jordan Thomas, who is the chair of the SEC Whistleblower lawyers the awards are very crucial since they encourage people to speak up.
The whistleblowers are very much protected, and their identity remains anonymous and confidential for safety purpose. However, whistleblowers are expected to be aware that they should be specific, timely and credible for the information they provide to investigators. If this is met, then it will be possible to win an award if a conclusion is reached and at the same time promote accountability and compliance with securities laws. Also, security laws might be complicated and SEC might also take years to arrive at a conclusion.