SEC Awards $1.6 Million to Compliance Officer for Protecting Investors

On April 22, the Securities and Exchange Commission announced an award of more than a million dollars to a compliance professional who provided information that assisted the SEC in an enforcement action against the whistleblower’s company.

The award involves a compliance officer who had a reasonable basis to believe that disclosure to the SEC was necessary to prevent imminent misconduct from causing substantial financial harm to the company or investors.

“When investors or the market could suffer substantial financial harm, our rules permit compliance officers to receive an award for reporting misconduct to the SEC,” said Andrew Ceresney, Director of the SEC’s Division of Enforcement. “This compliance officer reported misconduct after responsible management at the entity became aware of potentially impending harm to investors and failed to take steps to prevent it.”

The whistleblower in this matter will receive between $1.4 million and $1.6 million. Whistleblower awards can range from 10 percent to 30 percent of the money collected in a successful enforcement action with sanctions exceeding $1 million. By law, the SEC must protect the confidentiality of whistleblowers and cannot disclose information that might directly or indirectly reveal their identities.

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.