The Securities and Exchange Commission reports that it is receiving about seven (7) whistleblowers tips per day, and has received 334 tips in the first 50 days since the program became fully operational on August 12. At the current rate, the program should receive 2,438 tips a year. (“Whistle-Blowers, 7 per Day, Seek SEC Bounties,” Bloomberg).
Under the SEC’s whistleblower program, those whose qualified tips lead to more than $1 million in penalties receive from 10 percent to 30 percent of any amounts recovered by the SEC, depending on how important the tip was. To be qualified, a tip must provide relevant information that is not already known by or available to the SEC. So far, the top categories of tips involve market manipulation and misrepresentations and omissions to disclose material facts in connection with public offerings.
The payouts to whistleblowers can be quite large. In any recovery by the SEC of $1 million or more, the lowest amount a qualified tipper could get is $100,000. So far, there have been no payouts from the SEC’s $452 million bounty fund.
When a case is resolved, the SEC posts it on its whistleblower office’s website. Tippers have 90 days to file claims for awards.
“We’re going to continue to be out there to let people know the program exists and how to submit information and be eligible for an award,” Sean McKessy, director of the whistleblower office, was quoted as saying, adding that the initial data “shows that people know about the program and they’re submitting information in exactly the way they are supposed to.”
Page Perry is an Atlanta-based law firm with over 170 years collective experience in securities matters. Page Perry also advisers whistleblowers that have observed misconduct on Wall Street. For further information, please contact us.