US stock market policeman paid whistleblowers $ 1 billion

Posted on Sep 22, 2021 at 6:09 PMUpdated Sep 22, 2021, 7:23 PM

The figure is highly symbolic. The policeman of the American markets, the SEC (Securities and Exchange Commission), has just crossed the billion dollar mark in bonuses paid to whistleblowers. And this over the past nine years. 207 individuals have been paid by the SEC since the Dodd-Frank Act enacted the entry into force of this incentive program in 2012.

This amount was crossed with the attribution in mid-September of two awards granted to two whistleblowers. One for $ 110 million, the other for $ 4 million. This $ 110 million prize is the second highest in the history of the program, after that of more than $ 114 million dating from October 2020. Since January, the US stock market policeman has paid a total of $ 500 million in awards, as much as in the previous eight years.

“The help whistleblowers provide is crucial”

“The help that whistleblowers provide is critical to the SEC’s ability to enforce the rules for our financial markets,” said Gary Gensler, the chairman of the SEC, in a statement. Gurbir S. Grewal, SEC Enforcement Officer, added: “We hope these bonuses will encourage whistleblowers to continue to provide credible information about potential securities law violations.”

All payments to the SEC are made from an investor protection fund established by Congress, fully funded by monetary penalties paid to the SEC by law breakers. When a whistleblower’s investigation leads to a penalty exceeding $ 1 million, the whistleblower may receive between 10% and 30% of the amount.

Truly effective, this program could be even more so if certain practices were modified, estimates Gary Gensler. Certain compensation rules for “whistleblowers” ​​are therefore being reviewed. The SEC boss would like to be able to grant rewards without having to reduce them because other federal agencies have already paid them under alternative programs.

In Europe, no financial incentive

Today, only two countries in the world, outside the United States, give financial rewards to whistleblowers: Korea and Lithuania. In the fall, France will overhaul its whistleblower protection system. A bill to this effect was tabled in July, with the transposition of the European directive on whistleblowers scheduled for the end of the year. There are absolutely no plans to reward whistleblowers. Europe has always refused any financial incentive. No doubt to avoid abuses and not to fall into a society of denunciation.

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