On 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
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.