by Ben Vernia | August 2nd, 2014
On July 31, the Securities and Exchange Commission’s whistleblower office announced that it had awarded $400,000 to a company employee who reported his or her employer after failing to persuade the company to correct the practice. According to the SEC’s press release:
The Securities and Exchange Commission today announced an award of more than $400,000 for a whistleblower who reported a fraud to the SEC after the company failed to address the issue internally.
The SEC’s whistleblower program rewards high-quality, original information that results in an SEC enforcement action with sanctions exceeding $1 million. Whistleblower awards can range from 10 percent to 30 percent of the money collected in a case. By law, the SEC must protect the confidentiality of whistleblowers and cannot disclose any information that might directly or indirectly reveal a whistleblower’s identity.
This whistleblower provided the agency with specific, timely, and credible information that allowed for a more rapid investigation than otherwise would have been possible. The whistleblower had tried on several occasions and through several mechanisms to have the matter addressed internally at the company.
“The whistleblower did everything feasible to correct the issue internally. When it became apparent that the company would not address the issue, the whistleblower came to the SEC in a final effort to correct the fraud and prevent investors from being harmed,” said Sean McKessy, chief of the SEC’s Office of the Whistleblower. “This award recognizes the significance of the information that the whistleblower provided us and the balanced efforts made by the whistleblower to protect investors and report the violation internally.”