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SEC awards whistleblower $1 million

The Securities and Exchange Commission Thursday awarded a company outsider more than $1 million for helping stop illegal practices that were hurting investors.

The whistleblower provided “new information and substantial corroborating documentation of a securities law violation by a registered entity that impacted retail customers,” the SEC said. 

It was the first SEC whistleblower award since July 27.

The agency described the whistleblower as a “company outsider” but didn’t name the whistleblower or provide other details about the complaint.

By law, the SEC protects the confidentiality of whistleblowers and doesn’t disclose information that might directly or indirectly reveal their identity.

In its redacted October 12 award order (pdf), the SEC said the whistleblower didn’t submit a declaration with the initial claim, as required by SEC rules. 

But the SEC said the whistleblower’s failure to file the declaration was caused by a glitch in the SEC’s computer filing system. Later, when the SEC asked for the declaration, the whistleblower made the proper filing.

On that basis, the SEC decided to waive the strict filing deadline. “The record demonstrates that [the whistleblower] has satisfied all criteria for award,” the SEC said.

The SEC has now awarded more than $162 million to 47 whistleblowers since the first award in 2012.

Whistleblowers can be eligible for an award when they voluntarily provide “original, timely, and credible information” that leads to a successful enforcement action.

Jane Norberg, Chief of the SEC’s Office of the Whistleblower, said Thursday: “Today’s award reflects the impact that whistleblower information can have in uncovering violations that harm the retail investor.”  

“We welcome high-quality information about potential securities-law violations from those in and outside a company,” Norberg said.

Awards can range from 10 percent to 30 percent of the money collected when the penalties and sanctions exceed $1 million.

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Richard L. Cassin is the publisher and editor of the FCPA Blog. 

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1 Comment

  1. When the SEC does not list or identify the company aren't they doing a dis-service to current and future shareholders by protecting the organization from scrutiny.


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