The Securities and Exchange Commission (SEC) has made a whistleblower award of almost USD700,000 to a claimant whose prompt reporting led the SEC to open an investigation. The SEC whistleblower suffered “undue hardship” as a result of their activities.
According to an SEC press release, the whistleblower initially reported their concerns internally before contacting the SEC Whistleblower Office. The “significant information” this whistleblower brought to the Commission during the investigation resulted in money being returned to harmed investors.
“The SEC continues to be a flagship institution for whistleblower awards,” says whistleblower attorney Stephen M Kohn, partner at the qui tam law firm Kohn, Kohn & Colapinto. “Under the Dodd-Frank Act, SEC and CFTC whistleblowers can file anonymous claims without risking retaliation and earn rewards along the way.”
Under the SEC Whistleblower Program, securities fraud whistleblowers who report crimes that result in enforcement actions of USD1 million or more can become eligible for whistleblower awards ranging from 10-30 per cent of the sanctions obtained.
“Because of the whistleblower’s actions, the agency was able to identify the misconduct and conserve time and resources during the investigation,” says Jane Norberg, Chief of the SEC’s Office of the Whistleblower. “This whistleblower stepped forward and helped the agency to protect and compensate harmed investors.”
SEC whistleblowers have now been awarded almost USD501 million since the Program’s inception in 2012.