On Thursday, the SEC confirmed that a $17 million award had been granted to a whistleblower whose ‘detailed tip’ had ‘substantially advanced the agency’s investigation’ into a key player in the financial services industry. According to SEC enforcement director Andrew Ceresney, the information provided by the whistleblower and their assistance throughout the SEC’s investigation has helped his team ‘to conserve time and resources, and gather strong evidence supporting our case.’ The SEC has not disclosed the name of the tipster or their former employer.
Landmark award
The award is the second-largest on record for the regulator’s whistleblower program, following a $30m award handed down in September 2014 to a tipster living outside the United States who came forward with information about ‘an ongoing fraud that would have been very difficult to detect.’ Launched in 2011 under a provision of the Dodd-Frank Act, the SEC whistleblower program offers between 10 and 30 per cent of eventual SEC penalties over $1 million to individuals who come forward with unique and useful information. In its five-year history, the program has allocated a total of $85 million to 32 individual tipsters.
Raising the profile
Labaton Sucharow partner and chair of the firm’s whistleblower representation practice Jordan Thomas has confirmed that he represented the whistleblower at the centre of the SEC’s latest enforcement action and award. According to Mr Thomas, the unusually high value of the latest award is likely to put the SEC whistleblower program firmly on the radar of individuals working in the private sector, and may encourage more informants to come forward. ‘Each significant monetary award raises the profile of the SEC whistleblower program and the number of people willing to come forth,’ he told Bloomberg. ‘It’s a good day for the program. It rewarded someone for having the courage to speak up.’
Sources: Wall Street Journal; JD Supra
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