Three Whistleblower Awards Issued By SEC

The U.S. Securities and Exchange Commission (“SEC”) has recently announced whistleblower awards to four individuals who provided the SEC with information in three ongoing investigations.

The SEC announced on May 13, 2016 that it had awarded $3.5 million dollars to a  company employee whose tip bolstered an ongoing investigation with additional evidence of wrongdoing that strengthened the SEC’s case.   That award was followed with an announcement  by the SEC on May 17, 2016 that the SEC will award between $5 million and $6 million to a former company insider whose detailed tip led the agency to uncover securities violations that would have been nearly impossible for it to detect but for the whistleblower’s information. This award was the third largest award to a whistleblower by the SEC since the inception of the program.  Finally, on May 20, 2016, the SEC announced that it will jointly award more than $450,000 to two individuals for a tip that led the agency to open a corporate accounting investigation and for their assistance once the investigation was underway.

The whistleblower awards bring the past week’s payouts to $10 million.  Since the inception of the program in 2011, the SEC has awarded more than $67 million to 29 whistleblowers, including a more than $30 million whistleblower award in September 2014, a more than $14 million announced in October 2013.

These three awards clearly reaffirm the SEC’s focus on encouraging  whistleblowers to come forward and provide useful information to the agency to uncover securities violations.   To this end, Andrew Ceresney, Director of the SEC’s Division of Enforcement stated that “Employees are often best positioned to witness wrongdoing, … and (sic) when they report specific and credible tips to us, we will leverage that inside knowledge to advance our enforcement of the securities laws and better protect investors and the marketplace.”