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Alternative Market Briefing

The uneasy partnership between short-seller whistleblowers and the SEC

Friday, November 17, 2023

B. G., Opalesque Geneva:

Short sellers are quietly sharing their research about financial transgressions with the US Securities and Exchange Commission (SEC)'s whistleblower office in hopes of making some extra money, says a report by Bloomberg, which cites Nate Anderson, Kyle Bass and Carson Block among the tipsters.

The success of the Whistleblower program

The Whistleblower Program was created by U.S. Congress in 2010 - spurred in part by a failure to take into account a whistleblower who had warned against Madoff - and the SEC's Final Rules became effective the following year. More than 82,000 tips have been filed since the program began and are prioritised according to the level of research or their source.

Fiscal year (FY) 2023 was a record-breaking year for the SEC's Whistleblower Program. The SEC issued whistleblower awards totalling nearly $600m, the most ever awarded in one year, including a record-breaking $279m awarded to one whistleblower (whistleblower awards can range from 10 to 30% of the money collected when the monetary sanctions exceed $1m). The Commission received more than 18,000 whistleblower tips in FY2023, a record number and approximately 50% more than the then-record 1......................

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