SEC Whistleblower Earns $3 Million Payout for Alerting Commission to Securities Fraud
Today, the U.S. Securities and Exchange Commission (SEC) announced a whistleblower award of $3 million issued to an anonymous individual who alerted the SEC to ongoing securities fraud.
According to the SEC award order, the confidential whistleblower suffered both personal and professional hardships in the process. Enforcement staff were not aware of the securities fraud in question until the SEC whistleblower alerted the Commission to the misconduct.
The award order also noted that the whistleblower in this case unreasonably delayed reporting to the Commission, resulting in a lower payout. It is critical for whistleblowers to report fraud in a timely manner to the SEC Whistleblower Office. Delaying reporting can decrease the whistleblower award issued by the SEC, and in some cases, eliminate the whistleblower’s eligibility for an award altogether.
Under the Dodd Frank Act, SEC whistleblowers with original information of securities fraud who report to the Commission in a timely manner can earn whistleblower awards ranging from 10-30% of the penalties collected if the sanctions exceed $1 million.
Since issuing its first award in 2012, the SEC Whistleblower Office has now awarded approximately $942 million to 186 individuals.
“The whistleblower alerted the SEC to previously unknown conduct and then provided substantial additional assistance, which conserved a considerable amount of SEC resources,” said Emily Pasquinelli, Acting Chief of the SEC’s Office of the Whistleblower. “We have recently given awards to a significant number of whistleblowers, like the one awarded today, who played an important role in our enforcement program’s success.”
It is best practice to consult an experienced SEC whistleblower attorney if you have original information of securities fraud. By using a whistleblower attorney, you can remain fully anonymous and confidential and avoid the possibility of your employer uncovering your identity.
Ben Kostyack also contributed to this article.