(HedgeCo.Net) The Securities and Exchange Commission has announced an award of more than $300,000 to a whistleblower whose high-quality information and continuing assistance significantly contributed to a successful enforcement action.
The whistleblower became aware of the potential securities law violations in connection with audit-related responsibilities. Although individuals with audit or compliance responsibilities are generally not eligible for awards, a whistleblower who reasonably believes that an entity is engaging in conduct that would impede the investigation falls within one of the exceptions to that rule. Here, the whistleblower had a reasonable basis to believe that the entity would impede the Commission’s investigation. This is the fourth time the agency has paid a whistleblower with internal audit or compliance related responsibilities.
“This award is an example of the important role that audit and compliance professionals can play in assisting the Commission’s enforcement efforts, especially when the entity is attempting to thwart an investigation,” said Jane Norberg, Chief of the SEC’s Office of the Whistleblower. “The whistleblower attempted to remedy the conduct and provided exceptional assistance to the enforcement staff.”
The SEC has awarded more than $731 million to 124 individuals since issuing its first award in 2012. All payments are made out of an investor protection fund established by Congress that is financed entirely through monetary sanctions paid to the SEC by securities law violators. No money has been taken or withheld from harmed investors to pay whistleblower awards. Whistleblowers may be eligible for an award when they voluntarily provide the SEC with original, timely, and credible information that leads to a successful enforcement action. Whistleblower awards can range from 10-30% of the money collected when the monetary sanctions exceed $1 million.
As set forth in the Dodd-Frank Act, the SEC protects the confidentiality of whistleblowers and does not disclose information that could reveal a whistleblower’s identity.
