The Securities and Exchange Commission announced that it has awarded more than $4.5 million to a whistleblower whose internal reporting against a company spurred an internal investigation and a report submitted to the commission.
The whistleblower initially sent an anonymous tip to the company, alleging "significant wrongdoing," before submitting the same information to the SEC within 120 days of making the allegations. The company conducted its own self-report, which was then submitted to the SEC and another agency. This marks the first time a claimant has been rewarded under a provision of the whistleblower rules that were designed to encourage internal reporting by whistleblowers who also report their findings to the SEC within 120 days.
“In this case, the whistleblower was credited with the results of the company’s internal investigation, which were reported to the SEC by the company and led to the commission’s resulting enforcement action and the related action,” stated Jane Norberg, chief of the SEC’s Office of the Whistleblower. “The whistleblower gets credit for the company’s internal investigation because the allegations were reported to the commission within 120 days of the report to the company.”
The SEC has awarded approximately $381 million to 62 individuals since issuing its first whistleblower award in 2012. Payments are made out of an investor protection fund established by Congress and financed entirely through monetary sanctions paid to the SEC by securities law violators. Whistleblower awards can range from 10 to 30 percent of the funds collected when the monetary sanctions exceed $1 million.
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