Search Site
Menu
Recent Whistleblower Case Shows Potential for Reduction in Monetary Awards

On February 28, the U.S. Securities and Exchange Commission (SEC) awarded a whistleblower 20 percent of the sanctions paid in association with an enforcement action brought forth as a result of unique information provided by that whistleblower. In this case, the SEC clarified that the whistleblower’s own culpability in some of the securities violations at issue in the case resulted in a lower award than the individual might have received had he or she not had any responsibility in those violations.

There is not much detail provided in the SEC’s order, as is typical of these whistleblower awards. The agency purposefully is as vague as possible in its announcements so as not to accidentally expose the identity of its whistleblowers.

However, it is interesting that the SEC felt the need to point out the whistleblower could have earned more had the person not taken part in the securities violations. Typically, whistleblowers who are convicted of crimes related to misconduct are ineligible to earn awards under the whistleblower program. However, the SEC may issue awards to whistleblowers allowed in misconduct, but who were not criminally charged. The agency can even offer awards to whistleblowers who were charged with civil violations.

Culpability and delayed reports by a whistleblower are two of the main factors the SEC considers in determining if it will lower the amount of a monetary award. In contrast, factors that could increase an award’s size include the following:

• Assistance provided by a whistleblower during an investigation
• Significance of information provided by the whistleblower
• Law enforcement’s interest in the reported information
• The whistleblower’s participation in compliance systems that already exist internally

To learn more about the factors affecting the size of a potential SEC whistleblower award, meet with an experienced Dallas lawyer at Whistleblower Law for Managers.

Honors
Our Office
  • Dallas Office
    4514 Cole Ave
    #600
    Dallas, Texas 75205
    Phone: 214-306-8045
    Fax: 469-729-9926
Testimonials
  • "Steve Kardell was terrific in representing me in some very adversarial discussions with Citigroup and also later represented me in my testimony before the Financial Crisis Inquiry Commission."  -Richard Bowen, Citigroup Whistleblower

  • "Never thought my career would end like it did after 30 years of service. I was part of the first round of the so called reduction of force. I asked myself how can I be part of this with 30 years of seniority. How did they pick these 90 plus employees? Now, the culture of this organization made you question every decision they made. It wasn’t what you knew it’s was a culture of who you know. Nonetheless, I did not accept their severance package. I immediately starting looking for an attorney who would take on my case. After the initial call to Steve I had hope again. He was open and honest about everything and reassured me he would do his best for me, and he did. I had an awesome outcome. Thanks Steve you’re the best."  -S.S.

  • "Reaching out to Steve Kardell was the best decision I made. His ability to provide immediate insight and direction was very powerful, and a huge relief during a very stressful time period. For anyone struggling with a whistleblower situation, I would highly recommend at least speaking with Steve. After a 10 minute call with him, I had a better understanding of what I was dealing with. Even better, he gave me some immediate hope. In the end Steve did a better job than I thought was possible. Steve was able to get in contact with people in my organization, that I didn’t have access to. Because of his years of experience, he already has contacts in many organizations in Dallas. The entire situation was handled peacefully. I was impressed by his ability to “keep the peace”–rather than creating a battle with the organization. The reason I didn’t reach out to a lawyer initially, was because I thought it would mean an immediate end to any hope of a positive relationship with the company. Steve was able to address my concerns, and in the end I was able to continue to work for them."  -KS

FOLLOW US
Facebook Twitter Linkedin RSS Feed JD Supra