The US Securities and Exchange Commission has paid out nearly $50 million — its largest-ever whistleblower award.
The whistleblower tipped off the agency to a currency manipulation scheme at a bank, which resulted in successful enforcement action, according to the SEC. Reports from the Wall Street Journal show that the whistleblower is a trader from Bank of New York Mellon who had assisted with a related SEC investigation for over a decade. While a source named the whistleblower to the Journal, the SEC said confidentiality agreements restrict it from revealing the whistleblower’s identity.
The bank was accused of making artificially enlarged profits by giving pension funds less-than-desirable exchange rates and pocketing the difference. The institution didn’t deny these accusations and in 2015, it paid more than $700 million in fines. “Whistleblowers have proven to be a critical tool in the enforcement arsenal to combat fraud and protect investors.” Jane Norberg, chief of the SEC’s Office of the Whistleblower, said in a related statement.
This brings the SEC’s total award payout to over $500 million since the program was created. Among other market overseers and conduct regulators, the SEC has looked to staff within organizations to spot when pious “Tone from the Top” appears to be mere window-dressing, at odds with day-to-day operating realities.
In another recent item involving the SEC, we commented on the news that its Strategic Hub for Innovation and Financial Technology (FinHub) will hold virtual meetups to continue industry interactions through the COVID-19 pandemic. To find out more about these events, go to this page.