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SEC hands out $875,000 to two whistleblowers

June 3, 2014, 11:07 PM UTC

The U.S. Securities and Exchange Commission is giving two anonymous whistleblowers a total of $875,000.

The SEC said Tuesday that the money is an award for tipping off the government with information that led directly to enforcement of an undisclosed securities case. The SEC is required by law to protect the identity of whistleblowers, so the government releases very little specific information regarding the nature of the frauds they help uncover.

“These whistleblowers provided original information and assistance that enabled us to investigate and bring a successful enforcement action in a complex area of the securities market,” said Sean McKessy, who heads the SEC’s whistleblower program. “Whistleblowers who report their concerns to the SEC perform a great service to investors and help us combat fraud.”

The SEC typically awards whistleblowers an amount between 10% and 30% of the amount of money collected from the case, with additional future payouts being possible should the SEC collect more money from a defendant. The SEC’s whistleblower order said the two whistleblowers are receiving the maximum 30% award, which they will split, meaning that roughly $2.9 million was likely collected in this particular securities fraud case.

An SEC spokeswoman declined to comment on the award beyond the limited information in the SEC’s release and the whistleblower order.

The Wall Street Journal noted that Tuesday’s award was the first handed out to an SEC whistleblower so far this year, while the SEC added that it has now rewarded a total of eight tipsters since the whistleblower program went into effect in 2011.

There had been speculation last fall that the SEC might begin handing out awards more liberally after a whistleblower received a record $14 million award in October. But, so far this year, multiple claims for whistleblower awards have been denied, with the SEC saying the claimants took more than 90 days to submit their request for a payout.