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SEC Awards Whistleblower More Than $4.5 Million

On May 24, 2019, the SEC announced payment of more than $4.5 million to a whistleblower who sent an anonymous tip to the company alleging significant wrongdoing and then submitted the same information to the SEC.  (The order granting the award can be accessed here.)

In connection with this award, Jane Norberg, Chief of the SEC’s Office of the Whistleblower, said, “[i]n this case, the whistleblower was credited with the results of the company’s internal investigation, which were reported to the SEC by the company and led to the Commission’s resulting enforcement action and the related action.”  She explained that “[t]he whistleblower gets credit for the company’s internal investigation because the allegations were reported to the Commission within 120 days of the report to the company.”

The SEC noted that this is the first time a claimant is being awarded under the provision of the whistleblower rules designed to incentivize internal reporting, by providing that if a whistleblower “provide[s] information … to … an entity’s internal whistleblower, legal, or compliance procedures for reporting allegations of possible violations of law, and … within 120 days, submit[s] the same information to the Commission … the Commission will consider that [the whistleblower] provided information as of the date of [the whistleblower’s] original disclosure … .”  17 C.F.R. § 240.21F-4(b)(7).

Since issuing its first whistleblower award in 2012, the SEC has awarded approximately $381 million to 62 individuals.

© 2021 Proskauer Rose LLP. National Law Review, Volume IX, Number 148
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About this Author

Lloyd B Chinn, Financial, Whistleblower Attorney, Proskauer Law Firm
Partner

Lloyd B. Chinn is a Partner in the Labor & Employment Law Department and co-head of the Whistleblowing & Retaliation Group. He litigates employment disputes of all types before federal and state courts, arbitration tribunals (e.g., FINRA, JAMS and AAA), and before administrative agencies in New York and across the country. Lloyd's practice ranges from litigating compensation disputes to defending whistleblower, discrimination and sexual harassment claims. Although he represents employers in a wide range of industries, including law, insurance, health care, consulting, media,...

212-969-3341
Pinny Goldberg Labor and Employment Lawyer Proskauer Rose Law Firm
Associate

Pinny Goldberg is an associate in the Labor & Employment Law Department. Pinny represents employers in a broad array of matters before federal and state courts, FINRA and other arbitration panels, and administrative agencies, including the EEOC and its state equivalents, and in pre-litigation negotiations. Matters he works on include discrimination and harassment, wage and hour, wrongful discharge, whistleblowing and retaliation, covenants not to compete, breaches of fiduciary duty, unjust enrichment, and tort and contract claims. 

In...

212.969.3074
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