The US Securities and Exchange Commission (SEC) expects to pay an award of more than $30 million to a whistleblower – a total that’s more than twice the previous record payout announced in the commission’s 2-year-old whistleblower program.
An informant living in a foreign country who provided important, original information that led to a successful SEC enforcement action will receive the award. SEC officials said in a news release that the award demonstrates the international reach of the whistleblower program.
As required by the whistleblower program mandated by the US Dodd-Frank Wall Street Reform and Consumer Protection Act, the SEC will not disclose the whistleblower’s name. The program gives the SEC the ability to pay for high-quality, original information that results in SEC enforcement actions with sanctions of more than $1 million.
Whistleblowers can receive 10% to 30% of the money collected in a case. The fund is financed through sanctions paid to the SEC by securities law violators.
The award announced Monday was the fourth given to a whistleblower living outside the United States.
“This whistleblower came to us with information about an ongoing fraud that would have been very difficult to detect,” Andrew Ceresney, who directs the SEC’s Division of Enforcement, said in a news release. “This record-breaking award sends a strong message about our commitment to whistleblowers and the value they bring to law enforcement.”
The previous record for an SEC award to a whistleblower was $14 million, which was given in October 2013. The SEC has been paying monetary awards to whistleblowers since August 2012.
—Ken Tysiac (email@example.com) is a CGMA Magazine editorial director.