On May 5, the U.S. Securities and Exchange Commission (SEC) issued a $279 million whistleblower award: the largest in the history of the SEC Whistleblower Program. According to reporting by the Wall Street Journal, the award was connected to a $1.1 billion settlement between Swedish telecommunications company Ericsson and U.S. authorities over bribery charges.
The U.S. charged Ericsson with violating the Foreign Corrupt Practices Act (FCPA). According to the Department of Justice, “beginning in 2000 and continuing until 2016, the Company conspired with others to violate the FCPA by engaging in a longstanding scheme to pay bribes, to falsify books and records and to fail to implement reasonable internal accounting controls. Ericsson used third party agents and consultants to make bribe payments to government officials and/or to manage off-the-books slush funds.”
To settle the charges, Ericsson agreed to pay the SEC $540 million and the DOJ $520 million.
Under the Dodd-Frank Act, whistleblowers are able to report violations of the FCPA through the SEC Whistleblower Program. Qualified whistleblowers are entitled to monetary awards of 10-30% of the funds collected by the government in the case connected to their whistleblowing.
“The size of today’s award – the highest in our program’s history – not only incentivizes whistleblowers to come forward with accurate information about potential securities law violations, but also reflects the tremendous success of our whistleblower program,” said Gurbir S. Grewal, Director of the SEC’s Division of Enforcement, in a press release announcing the record award. “This success directly benefits investors, as whistleblower tips have contributed to enforcement actions resulting in orders requiring bad actors to disgorge more than $4 billion in ill-gotten gains and interest. As this award shows, there is a significant incentive for whistleblowers to come forward with accurate information about potential securities law violations.”
Further Reading:
Record $279 Million Whistleblower Award Went to a Tipster on Ericsson