In early June, the U.S. Securities and Exchange Commission (SEC) gave out the second-highest whistleblower award since 2011, the year its whistleblower program was established after the passage of the Dodd-Frank Act.
The award, for $17 million, went to an individual who significantly advanced an agency investigation, allowed the SEC to save time and resources and offered information of which the agency officials previously did not know. In the same order, the SEC declined to provide awards to two others, as the agency considered the information they disclosed to not be significantly helpful toward the investigation.
As part of the program, the SEC does not disclose the identities of whistleblowers, and so the order did not include any information that could potentially reveal who the individual is, and the company involved was also not shared with the public. It is interesting to note, however, that awards tend to be between 10 to 30 percent of the total money collected by the SEC, and thus the agency likely fined the company in question between about $50 million and $170 million.
In awarding whistleblowers, the SEC uses an investor protection fund Congress established as part of Dodd-Frank. The fund is financed through the money securities law violators pay to the federal agency.
The single-highest SEC whistleblower award remains $30 million, paid out to an individual in September 2014. Many legal experts agree that these high amounts of awards are likely to continue in the near future, as the SEC has placed a great deal of focus on the input of whistleblowers to seek action against businesses and organizations accused of wrongdoing.
As an executive, it’s important that you do whatever you can to protect your company. For further guidance on this important issue, speak with an experienced Dallas attorney at Whistleblower Law for Managers.