SEC awards record whistleblower payout

We now know a bit more about the mysterious whistleblower who was awarded a record $279 million from the Securities and Exchange Commission in May.

According to the Wall Street Journal, the whistleblower assisted in an alleged bribery case against Swedish telecommunications firm Ericsson, “people familiar with the matter” said. The SEC hasn’t announced which case the settlement was for, due to whistleblower protection rules, but Ericsson settled bribery charges with the US government in 2019 for $1.1 billion.

The settlement combined a $540 million disgorgement of illicit profits and a $520 million criminal penalty, related to activities in China, Djibouti, Indonesia, Kuwait, and Vietnam between 2000 and 2016.

The award, announced by the SEC last month, unseated a previous record of $114 million awarded to a whistleblower in 2020.

The SEC’s whistleblowing rules allow a potential informant to receive an award between 10% and 30% of the fines the commission collects as the result of a tip, in cases where the collections exceed $1 million.

In the latest award, the SEC said the whistleblower came forward after an investigation had already begun. “While the whistleblower’s information did not prompt the opening of the Commission’s investigation, their information expanded the scope of misconduct charged,” Creola Kelly, chief of the SEC’s Office of the Whistleblower, said in a statement.

Whistleblower payments come out of a fund financed by monetary sanctions paid by those who violate securities laws.

Would-be whistleblowers, the SEC notes, must “voluntarily provide the SEC with original, timely, and credible information that leads to a successful enforcement action, and adhere to filing requirements in the whistleblower rules.”