An anonymous whistleblower who helped the US Securities and Exchange Commission catch a mysterious bad actor was paid $279 million dollars as a reward for their assistance.
Under the Dodd-Frank financial reform law, whistleblowers who help the agency enforce its rules are entitled to between 10% and 30% of financial penalties over $1 million paid by the wrong-doer. In this case, the whistleblower appears to have caught a financial actor who was compelled to pay between $930 million and $2.7 billion to the SEC.
The previous highest reward was $114 million, paid in October 2020. Since the program began in 2011, bad actors have disgorged more than $4 billion of ill-gotten gains and interest payments, according to Gubir Grewal, the director of the SEC’s enforcement division. Whistleblowers with information in these cases have collected more than $1 billion.
The idea behind the rewards is that someone involved in a fraud will see a better chance of becoming dynastically wealthy by revealing a crime than participating in it. The agency attempts to keep these whistleblowers anonymous in order to encourage more people to call out misbehavior in the securities markets, so it is difficult to know exactly what enforcement action the leak is connected to.
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