SEC Awards Whistleblower $4.5 Million for Revealing Wrongdoing
The U.S. Securities and Exchange Commission (SEC) recently awarded a whistleblower more than $4.5 million after a tip the individual provided resulted in an employer reviewing allegations in an internal investigation and then reporting those allegations and its investigational findings to the SEC and another agency.
According to the SEC, the whistleblower submitted an anonymous tip to the company alleging wrongdoing and then also submitted that information to the SEC within 120 days of the initial internal report. The company was then able to investigate the allegations and make the proper reports to the Commission. By the time the investigation was complete, the company and the SEC were able to take appropriate action.
This marks the first time a claimant was awarded under this provision of whistleblower rules, which exists to incentivize internal reporting.
SEC awards continue to increase
With this case, the SEC has now awarded approximately $381 million to a total of 62 whistleblowers since the program began. The first award was granted in 2012. All money from the program comes from the monetary sanctions paid to the SEC by violators of securities laws—none of the money comes from investors who were harmed by those violators.
Whistleblowers who provide the SEC with timely, original and credible information are eligible to receive anywhere from 10 to 30 percent of the collected money if the sanctions are greater than $1 million. The program has been widely considered to be a rousing success since it was established, and this latest award opens up another avenue for whistleblowers to recover some significant compensation.
For more information on the steps involved in filing an SEC whistleblower claim, contact an experienced whistleblower lawyer at Kardell Law Group. Seeking the advice of an attorney allows you to ensure you use the right wording when making an internal report.