The Securities and Exchange Commission (SEC) has awarded a whistleblower $300,000 for exposing wrongdoing within a securities company.
According to the SEC’s Office of the Whistleblower, the employee had audit and compliance functions within the company. The employee reported the misconduct to company supervisors repeatedly, but they failed to take appropriate action to correct the situation.
The award is the first the SEC has given to a whistleblower with an audit and compliance role within a company. It comes amid a national debate on whether employees whose jobs involve monitoring company activity for regulatory and legal compliance should be permitted to file whistleblower complaints.
“Individuals who perform internal audit, compliance, and legal functions for companies are on the front lines in the battle against fraud and corruption,” said SEC Office of the Whistleblower Chief Sean McKessy. “These individuals may be eligible for an SEC whistleblower award if their companies fail to take appropriate, timely action on information they first reported internally.”
The SEC said that this particular whistleblower reported concerns of wrongdoing to appropriate personnel within the company, including a supervisor, but the company took no action within 120 days to correct the alleged wrongdoing. The employee then took the information to the SEC, prompting the agency to take enforcement action.
The SEC doesn’t disclose the names of whistleblowers or companies involved in whistleblower cases publicly – a measure that protects the identity and careers of whistleblowers while encouraging would-be whistleblowers to report any fraud, waste, abuse, mismanagement, and other misconduct.
The SEC’s Office of the Whistleblower paid its first-ever whistleblower award in 2012, about two years after the program was established under the Dodd-Frank Wall Street Reform and Consumer Protection Act to help prevent the same fraud that contributed to the economic collapse of 2007-2008.
Since then, the SEC whistleblower program has seen consistent growth year after year. This latest case is the tenth whistleblower award the agency has paid this year.