Whistleblowers – Keeping Corporate America Accountable While Being Awarded Millions of Dollars in the Process

Last week, on September 14, 2018, the Securities and Exchange Commission (the “SEC”) announced that a whistleblower has earned an award of more than $1.5 million bringing the total awarded to approximately $322 million to 58 individuals since issuing its first award in 2012. According to the SEC, the whistleblower provided the SEC with vital information and ongoing assistance that proved important to the overall success of an enforcement action. However, the SEC’s order notes that the award was reduced because the whistleblower did not promptly report the misconduct and benefited financially during the delay. “This award reflects the value of the information while underscoring the need for individuals to come forward without delay so that our enforcement staff may quickly leverage the information and prevent further investor harm,” said Jane Norberg, Chief of the SEC’s Office of the Whistleblower.

Earlier this month, the agency announced that it was paying two unidentified whistleblowers a combined $54 million for their roles in enforcement actions. The largest to be awarded was $50 million split between two whistleblowers in March.

The Dodd-Frank Wall Street Reform and Consumer Protection Act gives the SEC authority to reward individuals who come forward with high-quality original information that leads to aSEC enforcement action in which over $1,000,000 in sanctions is ordered. The range for awards is between 10% and 30% of the money collected. The Act allows the SEC to minimize the harm to investors, better preserve the integrity of the United States’ capital markets, and more swiftly hold accountable those responsible for unlawful conduct.

If you believe you are aware of possible securities law violations, the lawyers at Johnson Fistel can assist you in determining whether and how to approach the SEC. By law, the SEC protects the confidentiality of whistleblowers and does not disclose information that might directly or indirectly reveal a whistleblower’s identity.

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