Today, the Securities and Exchange Commission (SEC) announced a whistleblower award of more than $300,000 issued to an individual who became aware of the frauds after conducting audit-related responsibilities.
Usually, auditors or compliance officials are not eligible for SEC whistleblower awards. However, if claimants learn original information of frauds and have a “reasonable basis” to believe the entity is engaging in illegal activities that will “impede an investigation of the misconduct,” they will fall within one of the exemptions of that rule.
According to the SEC award order, the whistleblower “aggressively attempted to remedy the misconduct and suffered a unique hardship.”
Established under the Dodd Frank Act of 2010, the SEC Whistleblower Program offers financial rewards to fully confidential and anonymous whistleblowers.
In FY 2020, the SEC Whistleblower Program announced record-breaking accomplishments in their annual report to Congress, citing to new milestones in number of tips received, whistleblower awards issued, and dollar amount of whistleblower awards issued. Since 2012, the Program has issued $731 million in awards to 124 individuals.
“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.”
If you have knowledge of securities or commodities violations, contact an experienced SEC whistleblower attorney today.