The Securities & Exchange Commission (“SEC”) has announced an approximately $3 million whistleblower award to an unnamed company insider who provided information to the SEC regarding a complex fraud that would otherwise been difficult to uncover.
Whistleblowers who provide the SEC such information are eligible for awards of 10 to 30 percent of the money collected in a successful enforcement action exceeding $1 million. This multi-million dollar payout is the third highest award to date the whistleblower bounty program was introduced in 2011. Over $50 million overall has been paid to 18 whistleblowers, including a $30 million award in 2014 and a $14 million award in 2013. These large awards will no doubt encourage even more whistleblowers to go to the SEC and therefore companies would be wise to make every effort to support and encourage internal reporting mechanisms for whistleblowers. This related article provides information on whistleblower best practices.