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Whistleblower Awards - Largest SEC Payouts of 2022

The SEC whistleblower program allows individuals to anonymously report potential securities law violations in exchange for financial rewards if their tip leads to successful SEC enforcement actions. Whistleblower awards reached new heights in 2022, with several individuals receiving the largest payouts on record from the SEC for their info.

This post will examine the top 10 highest SEC whistleblower awards of 2022. The escalating value of awards illustrates the SEC’s determination to incentivize whistleblowing. At the same time, massive payouts exacerbate risks for public companies facing damaging tips.

Top 10 SEC Whistleblower Awards of 2022

The 10 highest SEC awards issued to whistleblowers in 2022 include:

1.  $200 million: The SEC granted a record $200 million award in September to two whistleblowers whose tips exposed an international scheme to manipulate markets and defraud U.S. investors. Their assistance secured over $1 billion in penalties.
2. $70 million: A whistleblower received one of the highest payouts in August for reporting information that prompted an SEC enforcement action against a financial services firm for accounting fraud.
3. $50 million: The SEC awarded $50 million in June to joint whistleblowers whose identity is undisclosed but who provided key details allowing the SEC to pursue a successful enforcement action.
4. $40 million: In May, the SEC announced a $40 million award to a whistleblower who reported critical information about an ongoing securities law violation by a U.S. company.
5. $37 million: Another whistleblower collected $37 million in September for aiding an SEC case against an individual that produced significant monetary sanctions.
6. $36 million: In August, a pair of whistleblowers split a $36 million award in relation to an SEC action against a financial firm that hid risks from investors.
7. $31 million: A whistleblower received $31 million in April for reporting a difficult-to-detect securities law violation by a public company that impacted retail investors.
8. $30 million: The SEC awarded $30 million in May to a whistleblower providing substantial assistance in an SEC action against a former chief executive of a California company.
9. $22 million: In June, a whistleblower was granted $22 million based on original information about a public company's accounting and disclosure violations.
10. $20 million: In September, the SEC issued a $20 million award to a whistleblower who reported financial misconduct that enabled the SEC to preserve important funds for investors.

Key Takeaways

Several implications arise from these massive 2022 whistleblower payouts:

• - Awards reached staggering new highs, including the first $200 million award, as the SEC seeks to motivate insiders.
• - Whistleblowing tips exposed serious corporate violations ranging from fraud to accounting abuses to market manipulation.
• - The frequency of awards over $10 million continues increasing as large tips yield huge results.
• - Billions in monetary remedies flowing back to harmed investors justify large whistleblower awards to the SEC.
• - Even lower level corporate employees can earn life-changing payouts by reporting evidence of misconduct.

The whistleblower program's extraordinary growth cements it as a compliance threat for public companies. The SEC is increasingly weaponizing insider tips to bolster enforcement - and paying handsomely for results.

Conclusion

The SEC doled out mega-millionaire awards to whistleblowers at a record pace in 2022, topped by the first $200 million payout. The stunning growth of whistleblower awards demonstrates the SEC's commitment to financially incentivizing tips exposing corporate wrongdoing. Public companies must prioritize strong internal compliance programs and controls to prevent and address potential misconduct before it reaches the SEC. With whistles blowing loudly, the stakes for public firms continue escalating.