Compliance Professional Awarded $300,000 by SEC

Whistleblower Came to SEC After Reporting Internally and Company Failed to Take Action

On August 29, 2014, The Securities and Exchange Commission announced a whistleblower award of more than $300,000 to a company employee who performed audit and compliance functions and reported wrongdoing to the SEC after the company failed to take action when the employee reported it internally.

It’s the first award for a whistleblower with an audit or compliance function at a company.

“Individuals who perform internal audit, compliance, and legal functions for companies are on the front lines in the battle against fraud and corruption. They often are privy to the very kinds of specific, timely, and credible information that can prevent an imminent fraud or stop an ongoing one,” said Sean McKessy, Chief of the SEC’s Office of the Whistleblower. “These individuals may be eligible for an SEC whistleblower award if their companies fail to take appropriate, timely action on information they first reported internally.”

This particular whistleblower award recipient reported concerns of wrongdoing to appropriate personnel within the company, including a supervisor. But when the company took no action on the information within 120 days, the whistleblower reported the same information to the SEC. The information provided by the whistleblower led directly to an SEC enforcement action.

The SEC’s whistleblower program rewards high-quality, original information that results in an SEC enforcement action with sanctions exceeding $1 million. Whistleblower awards can range from 10 percent to 30 percent of the money collected in a case. By law, the SEC must protect the confidentiality of whistleblowers and cannot disclose any information that might directly or indirectly reveal a whistleblower’s identity.

Learn more about whistleblower awards at our Whistleblower Protection Resources section.

The decision to blow the whistle, or not, is always complex. It must be made with as much information as possible. The Whistleblower Handbook: A Step-by-Step Guide to Doing What’s Right and Protecting Yourself is the essential reference guide for whistleblowers. If you are considering blowing the whistle, this is the most comprehensive guide available.