The Securities and Exchange Commission (SEC) announced it has paid a whistleblower more than $1 million for providing information that helped the agency successfully prosecute a registered entity that harmed retail customers.

This brings the SEC’s total whistleblower awards to $162 million since 2011.

“Today’s award reflects the impact that whistleblower information can have in uncovering violations that harm the retail investor,” said Jane Norberg, chief of the SEC’s Office of the Whistleblower. “We welcome high-quality information about potential securities-law violations from those in and outside a company.”

Whistleblower tips have resulted in more than $975 million in financial remedies since the agency’s whistleblower program was created in 2011 by the Dodd-Frank Act.

So far, the largest check the SEC has written to a whistleblower exceeded $30 million.

By law, the SEC protects the confidentiality of whistleblowers and does not disclose information on cases that might directly or indirectly reveal a whistleblower’s identity.

Whistleblowers may be eligible for an award when they voluntarily provide the SEC with “original, timely and credible information that leads to a successful enforcement action,” the agency says.

Not every whistleblower receives an award, but the program is certainly encouraging those who believe they have material information to come forward. There were more than 4,000 reports made to the SEC’s Office of the Whistleblower last year.

Whistleblower awards can range from 10 percent to 30 percent of the money collected when the monetary sanctions exceed $1 million. All payments are made from an investor protection fund established by Congress that is financed entirely through monetary sanctions paid to the SEC by securities law violators.  No money is taken or withheld from harmed investors to pay whistleblower awards, the SEC says.  

“Assistance and information from a whistleblower who knows of possible securities law violations can be among the most powerful weapons in the law enforcement arsenal of the Securities and Exchange Commission,” the SEC says on its whistleblower website (www.sec.gov/whistleblower).

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