Washington D.C., July 17, 2015: Today the Securities and Exchange Commission (SEC) announced that it paid a whistleblower award of more than $3 million. The company insider whose information helped the SEC crack a complex fraud, received the third highest award to date under the SEC’s whistleblower program.
Stephen M. Kohn, Executive Director of the National Whistleblower Center praised the award stating “Paying monetary rewards to whistleblowers is the best way to ensure that the top management of publicly traded companies understand that there is a new ‘cop on the block.’ Those new cops are their own employees, who can now work side-by-side with SEC investigators in documenting violations of law. Granting large public rewards is the single best tool the SEC has to send this message.”
The SEC stated that the whistleblower gave the Agency detailed information that comprehensively laid out the fraudulent scheme which otherwise would have been very difficult for investigators to detect. The whistleblower’s initial tip also led to related actions that increased the whistleblower’s award.
“Insiders may hold the key to helping our investigators unlock intricate fraudulent schemes,” said Andrew Ceresney, Director of the SEC’s Division of Enforcement. “By providing significant financial incentives for people to come forward, the SEC’s whistleblower program continues to be profoundly effective in helping us protect investors and hold wrongdoers accountable.”
Whistleblowers who provide the SEC with unique and useful information that contributes to a successful enforcement action are eligible for awards that can range from 10 percent to 30 percent of the money collected when financial sanctions exceed $1 million. By law, the SEC protects the confidentiality of whistleblowers and does not disclose information that might directly or indirectly reveal a whistleblower’s identity.
The decision to blow the whistle, or not, is always complex. It must be made with as much information as possible. The Whistleblower Handbook: A Step-by-Step Guide to Doing What’s Right and Protecting Yourself is the essential reference guide for whistleblowers. If you are considering blowing the whistle, this is the most comprehensive guide available.