The Securities and Exchange Commission Monday announced an expected award of more than $30 million to a whistleblower living overseas who provided key original information that led to a successful SEC enforcement action.
The award will be the largest made by the SEC’s whistleblower program and the fourth award to a whistleblower living in a foreign country, the SEC said.
“This whistleblower came to us with information about an ongoing fraud that would have been very difficult to detect,” said Andrew Ceresney, Director of the SEC’s Division of Enforcement.
The agency didn’t provide any other details about the whistleblower or the target of the complaint.
The previous high for an SEC award to a whistleblower was $14 million in October 2013. The SEC said then the whistleblower’s information led to an enforcement action “that recovered substantial investor funds.”
Sean McKessy, Chief of the SEC’s Office of the Whistleblower, said: “Whistleblowers from all over the world should feel similarly incentivized to come forward with credible information about potential violations of the U.S. securities laws.”
The SEC whistleblower program rewards high-quality, original information that results in an SEC enforcement action with sanctions exceeding $1 million. Whistleblower awards can range from 10 percent to 30 percent of the money collected in a case.
The money paid to whistleblowers comes from an investor protection fund established by Congress at no cost to taxpayers or harmed investors, the SEC said. The fund is financed through monetary sanctions paid by securities law violators to the SEC.
“Money is not taken or withheld from harmed investors to pay whistleblower awards,” the SEC said.
The program was established in 2012 under 2010’s Dodd-Frank Wall Street reform law. It applies to complaints involving securities law violations, including FCPA cases.
By law, the SEC protects the confidentiality of whistleblowers and doesn’t disclose information that might directly or indirectly reveal a whistleblower’s identity, the agency said.
The SEC made one whistleblower award in fiscal year 2012, four in FY 2013, and nine so far in FY 2014, it said Monday.
“We’re pleased with the consistent yearly growth in the number of award recipients since the program’s inception,” McKessy said.
Richard L. Cassin is the publisher and editor of the FCPA Blog. He can be contacted here.
When will some of the UK bankers admit to their conscious process of deceit? They can make even more money from whistle blowing. They should perhaps view it as purchasing a clear conscious. A true money can't buy object! #Dunbaractiongroup
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