Oct 11

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And the biggest whistleblower award goes to…

…nobody knows.  The recipient of a $14 million plus whistleblower award, the largest thus far, has chosen to remain anonymous and the SEC is legally obligated to protect his or her anonymity.

In announcing the award, the SEC would only say that the original information and assistance provided by the whistleblower led to an SEC enforcement action that recovered substantial investor funds.  The SEC also noted that the information provided allowed the SEC to investigate more quickly than otherwise would have been possible, with less than six months between receiving the whistleblower’s tip and an enforcement action against the perpetrators to secure investor funds.

The press release issued also reminded the public that

“The SEC’s Office of the Whistleblower was established in 2011 as authorized by the Dodd-Frank Act.  The whistleblower program rewards high-quality original information that results in an SEC enforcement action with sanctions exceeding $1 million, and awards can range from 10 percent to 30 percent of the money collected in a case.  Payments to whistleblowers are made from a separate fund previously established by the Dodd-Frank Act and do not come from the agency’s annual appropriations or reduce amounts paid to harmed investors.”

By successfully protecting the confidentiality of the whistleblower, the SEC may be able to encourage more whistleblowers to come forward who might otherwise be concerned about revealing their identity.





About the author

Renee Howdeshell

Renee Howdeshell is a founding member of Fulcrum Inquiry, an accounting, finance and economic consulting firm that performs damage analyses for commercial litigation, forensic accountings, royalty & distribution audits, financial investigations, and business valuations. Ms. Howdeshell holds a degree in Finance and Marketing from the University of Virginia's McIntire School of Commerce and is a Certified Public Accountant (CPA) and a Certified Fraud Examiner (CFE). She has testified as an expert witness in federal court, CA state court and arbitration regarding the results of her work. She can be reached at (213) 787-4112 and her resume is available at www.fulcrum.com.

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