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I’d wager a big part of how they make money is as SEC whistleblowers. It’s not as huge of money as shorting is - but it’s typically a single digit percentage of

I’d wager a big part of how they make money is as SEC whistleblowers. It’s not as huge of money as shorting is - but it’s typically a single digit percentage of the recovered fines. Considering these guys nailed a company that defrauded people of $3 BILLION dollars, they’d net $30 mil from turning that company in even if the payout is only 1%. The SEC has a policy of paying out part of recovered fines as bounties to whistleblowers to align incentives. If your company is doing something sketchy, you get a payout by doing the right thing. I’m not a lawyer but I think that mechanism works just as well if you’re an external reporter of fraud. SEC makes money and pays you for your diligent forensic auditing.

hn_throwaway_99 2y ago
Do you have any evidence/links that discuss this? I'd be surprised that they'd get any whistleblower fees, because they themselves aren't actually the whistleblower. E.g. a whistleblower usually refers to actual insiders with private knowledge that then "blow the whistle". In Hindenburg's case, they basically just did research anyone is capable of doing (although in many cases, after they became known, they did have whistleblowers reach out to them).
- yieldcrv 2y ago
  This bounty program doesn’t require being an employee Astute observers and outsiders - doing the same thing prolific short sellers do - have received some of the biggest bounty payouts The source is on the SEC’s bounty payout page
- deleted 2y ago
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yieldcrv 2y ago
Its 10% to 30% where did you get 1% from, its a really good bounty system to clean up the markets and you get to be anonymous if you use a lawyer, the trick is to get the SEC to prioritize it. They are now inundated after some large payouts made the news in financial circles
- grajaganDev 2y ago
  Large indeed - there was a $279 million payout to a bounty hunter in 2023: https://www.sec.gov/newsroom/press-releases/2023-89 https://www.sec.gov/newsroom/press-releases/2023-89

hn_throwaway_99 2y ago

Do you have any evidence/links that discuss this? I'd be surprised that they'd get any whistleblower fees, because they themselves aren't actually the whistleblower. E.g. a whistleblower usually refers to actual insiders with private knowledge that then "blow the whistle". In Hindenburg's case, they basically just did research anyone is capable of doing (although in many cases, after they became known, they did have whistleblowers reach out to them).

yieldcrv 2y ago
This bounty program doesn’t require being an employee Astute observers and outsiders - doing the same thing prolific short sellers do - have received some of the biggest bounty payouts The source is on the SEC’s bounty payout page
deleted 2y ago
[deleted]

yieldcrv 2y ago

Its 10% to 30% where did you get 1% from, its a really good bounty system to clean up the markets and you get to be anonymous if you use a lawyer, the trick is to get the SEC to prioritize it. They are now inundated after some large payouts made the news in financial circles

grajaganDev 2y ago
Large indeed - there was a $279 million payout to a bounty hunter in 2023: https://www.sec.gov/newsroom/press-releases/2023-89 https://www.sec.gov/newsroom/press-releases/2023-89