The U.S. Securities and Exchange Commission’s whistleblower program received the second-highest number of tips in its history in fiscal 2019 as it passed the $2 billion mark for sanctions in enforcement matters resulting from tips.
In its annual report to Congress on the program, the SEC said it fielded 5,212 tips from whistleblowers this year — 1% down from 2018 but up 78% from the start of the program eight years ago and the second-highest total ever.
The commission noted it was an “unusual year challenged by a lapse in appropriations” — a reference to the government shutdown — but it still awarded about $60 million to eight whistleblowers “whose information and cooperation assisted the commission in bringing successful enforcement actions.”
Awards over the lifetime of the program have now reached approximately $387 million to 67 individuals and wrongdoers have now paid more than $2 billion in total sanctions, including more than $1 billion in disgorgement of ill-gotten gains and interest, of which almost $500 million has been, or is scheduled to be, returned to harmed investors.
“The whistleblower program continues to have a significant positive impact on the commission’s enforcement efforts and protection of investors and markets,” the SEC said.
The program came into effect as part of the post-crisis Dodd-Frank financial reforms. SEC Chairman Jay Clayton said it had “made substantial progress since its inception and has proven to be an invaluable component of our enforcement efforts.”
According to the commission, tips came in this year from individuals in 70 countries outside of the U.S., as well as from every state in the U.S. They covered a broad range of allegations, including nearly 300 relating to cryptocurrencies, “an emerging area of interest in FY 2019.”
The awards in 2019 included one of $37 million to a whistleblower who, the SEC said, “provided significant evidence and assistance” that enabled the SEC to bring an enforcement action against JPMorgan Chase — the third-highest award in the history of the program.