Jane Norberg, theSEC whistleblower chief. Credit: Diego M. Radzinschi

The U.S. Securities and Exchange Commission on Thursday issuedthe largest bounty in the decadelong history of its program forpaying tipsters, awarding nearly $50 million to a whistleblower whowas credited with providing "firsthand" information about corporatemisconduct that led to an enforcement action.

"This award marks several milestones for the whistleblowerprogram," Jane Norberg, chief of the SEC's whistleblower office,said. "This award is the largest individual whistleblower awardannounced by the SEC since the inception of the program, and bringsthe total awarded to whistleblowers by the SEC to over $500million, including over $100 million in this fiscal year alone.Whistleblowers have proven to be a critical tool in the enforcementarsenal to combat fraud and protect investors."

With the latest award, the SEC topped its previous record: a $39million bounty issued in 2018. The SEC has now awarded 13 separatetipsters in 2020. In the fiscal year that ended Sept. 30, the SECissued awards to eight tipsters, according to the whistlebloweroffice's most recent report to Congress.

Under the SEC's whistleblower program, created by the Dodd-Frankreforms that followed the financial crisis, tipsters deemed worthyof awards are entitled to between 10% and 30% of the moneycollected in enforcement actions that result in more than $1million in sanctions.

Following its standard practice, the SEC did not name therecipient of its latest award, nor did it identify the enforcementaction that gave rise to the bounty. In the order approving theaward, the SEC credited the whistleblower for providing firsthandobservations of "misconduct by the company that was previouslyunknown to the staff."

In the course of the SEC's probe, the whistleblower "laid out indetail substantial aspects of the scheme and provided a road mapfor the investigation," the commission added, noting that theenforcement action helped return a significant amount of money toharmed investors.

The SEC order suggested that the whistleblower had assistedother federal agencies in bringing enforcement actions—andattempted to be rewarded for doing so. An SEC panel denied thewhistleblower's claims in connection with those other agencies,finding that they were not sufficiently related to the commission'senforcement action. The SEC's order indicated that thewhistleblower did not appeal that preliminary determination.

In the same order, the SEC rejected a second award applicant whoclaimed to have "jointly" tipped off the commission with therecipient of the nearly $50 million bounty. The SEC said repeatedlythat there was "no evidence" that the second applicant assistedwith the enforcement action and that the purported whistleblowermissed the deadline for pursuing a bounty by 10 months.

The purported whistleblower claimed that the recipient ofThursday's whistleblower award had submitted an application onbehalf of "both of them, as there was no space for them to bothsign," the SEC said.

The SEC said there was "no evidence" that the second applicantparticipated "in any manner" with the other whistleblower'stip.

"Accordingly," the SEC said, the purported second tipster "doesnot qualify as a whistleblower and is thus not eligible to receivean award."

C. Ryan Barber, based in Washington, coversgovernment affairs and regulatory compliance. Contact himat [email protected].On Twitter: @cryanbarber