Consumer Fraud

SEC Whistleblower Gets Agency’s Highest-Ever Award

SEC Office of the Whistleblower wikipedia image 342x210 SEC Whistleblower Gets Agencys Highest Ever AwardThe Securities and Exchange Commission (SEC) announced Monday that one whistleblower who helped regulators with their investigations of securities violations will receive the agency’s highest-ever award of more than $33 million.

In addition to the latest award, which exceeds the previous high of $30 million awarded to a whistleblower in 2014, the SEC said that two additional whistleblowers will share an award of nearly $50 million.

“These awards demonstrate that whistleblowers can provide the SEC with incredibly significant information that enables us to pursue and remedy serious violations that might otherwise go unnoticed,” said Jane Norberg, Chief of the SEC’s Office of the Whistleblower.  “We hope that these awards encourage others with specific, high-quality information regarding securities laws violations to step forward and report it to the SEC.”

The SEC’s whistleblower program protects the identities of whistleblowers and does not release any information that could potentially expose a whistleblower.

While the $33 million award is the highest bounty paid to an informant since the inception of the SEC’s whistleblower program in 2011, another whistleblower is in line to receive a much larger award.

According to Bloomberg, the agency in July “informed six whistle-blower applicants that one of them would receive $48 million and a second would get $13 million.”

The latest awards are also the first handed down since the U.S. Supreme Court narrowed SEC whistleblower protections in a landmark decision that reversed the broader interpretations of the Dodd-Frank Wall Street Reform and Consumer Protection Act. In Digital Realty Trust v. Somers, the high court ruled that protections applied only to whistleblowers who report violations and fraud to the SEC, thereby barring informants who call out misconduct internally from whistleblower protections.

According to the The National Law Journal, the Supreme Court’s ruling raises questions for the SEC about the compliance programs of private companies, such as “how vociferously the whistleblower office should continue to promote internal reporting as a first step for would-be tipsters.”

The SEC, which awards whistleblowers between 10 percent and 30 percent of the money collected when sanctions from an enforcement action exceed $1 million, “looks fondly on those who first raise concerns to their employers,” according to The National Law Journal.