The Securities and Exchange Commission has announced that it will pay an unidentified whistleblower, a compliance officer, an award of about $1.5 million. This is the second whistleblower award given to an employee with internal audit or compliance responsibilities, after $300,000 was awarded to a compliance officer in August 2014.
According to the Securities and Exchange Commission, the compliance officer who received the award “had a reasonable basis to believe that disclosure to the SEC was necessary to prevent imminent misconduct from causing substantial financial harm to the company or investors.” Neither the whistleblower nor the company has been identified, in an effort to protect whistleblowers and encourage them to report fraudulent activity to the Securities and Exchange Commission. By law, the Securities and Exchange Commission cannot disclose the identity of the whistleblower or any identifying information.
The Securities and Exchange Commission’s Whistleblower Program was set up in 2011 with the Dodd-Frank Wall Street Reform and Consumer Protection Act. Since then, the commission has paid upwards of $50 million to 16 different whistleblowers who provided the SEC with information that contributed to a successful enforcement action of securities law violations.
Whistleblower awards can range from 10 percent to 30 percent of the money collected in a successful enforcement action with sanctions exceeding $1 million. Awards are generally given only to the first whistleblower to file, and the amount is at the discretion of the Securities and Exchange Commission. The whistleblower must provide original information, which the Dodd-Frank Whistleblower Law defines as “derived from the independent knowledge or analysis of a whistleblower,” “not known to the SEC other than by the whistleblower as the original source of the information,” and “not exclusively derived from an allegation made in a judicial or administrative hearing, in a government report, hearing, audit, or investigation, or from the news media, unless a whistleblower is the source of the information.”
The Securities and Exchange Commission encourages potential whistleblowers to retain an attorney to help evaluate the information in your possession, increase your chances of receiving and maximizing a whistleblower reward, help protect your anonymity, and aid in filing your claim.
Evans Law Firm, Inc. handles whistleblower and qui tam (False Claims Act) lawsuits, as well as securities fraud cases. If you have a potential whistleblower claim, please contact Evans Law Firm, Inc. at 415-441-8669 or via email at firstname.lastname@example.org.