Meyer Wilson

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Whistleblower Receives Over $5 Million in SEC Award

Meyer WilsonOn May 17, 2016, the Securities and Exchange Commission announced that a former company insider would be awarded between $5 and $6 million for detailed tips regarding securities violations that the agency deemed nearly impossible to discover had it not been for the information from the whistleblower.

It is the third highest whistleblower award granted by the SEC. Previous larger awards have included $30 million and $14 million. Since 2011—when the whistleblower program began—the SEC has awarded 29 whistleblowers approximately $67 million in total awards.

Director Andrew Ceresney of the SEC’s Division of Enforcement said the following,

Employees are often best positioned to witness wrongdoing. When they report specific and credible tips to us, we will leverage that inside knowledge to advance our enforcement of the securities laws and better protect investors and the marketplace.

By law, whistleblowers are entitled to anonymity. The SEC does not disclose any information that would potentially reveal the identity of the whistleblower.

To be eligible for a whistleblower award, a person must voluntarily provide the SEC with original information that leads to a successful enforcement action resulting in fines in excess of $1 million. Under the whistleblower rules, the SEC has the discretion to award a whistleblower from 10-30 percent of the amount collected from the enforcement action. The awards are paid from a separate fund that Congress established under the Dodd-Frank Act and does not affect any monies paid to defrauded investors.

Categories: SEC News

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