SEC To Award Record $30M To Whistleblower

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SEC To Award Record $30M To Whistleblower

Earlier this week, the SEC announced that it anticipates awarding more than $30 million to a whisteblower who furnished critical information that ultimately resulted in a successful enforcement action. The award would be the most ever given by the agency under its new authority under the Dodd-Frank Act. According to sources, the award will range from $30 million to $35 million and will comprise the biggest made by the SEC’s three-year-old whistleblower office and the fourth award made to a foreign informant. As of now, the highest award is $14 million, which was given in October 2013.

According to SEC Enforcement Director Andrew Ceresney, the whistleblower “came to [the SEC] with information about an ongoing fraud that would have been very difficult to detect. This record-breaking award sends a strong message about our commitment to whistleblowers and the value they bring to law enforcement.”

The SEC cannot release the identity of the whistleblower due to its strict anonymity protection rules, but the whistleblower did release a statement through his/her attorney: “I was very concerned that investors were being cheated out of millions of dollars and that the company was misleading them about its actions. Deception had become an accepted business practice.”

The whistleblower’s attorney also issued a statement: “Our client exposed extraordinarily deceitful and opportunistic practices that were deeply entrenched and well hidden. Federal regulators never would have known about this fraud otherwise, and the scheme to cheat investors likely would have continued indefinitely.”

The SEC did state that it wished the whistleblower had come forth sooner. The agency reduced the award to a percentage lower than the average percentage awarded to other successful claimants because of the delay.

Sean McKessy, chief of the whistleblower office expressed satisfaction with the international reach of the whistleblower award program: “This award of more than $30 million shows the international breadth of our whistleblower program as we effectively utilize valuable tips from anyone, anywhere to bring wrongdoers to justice. Whistleblowers from all over the world should feel similarly incentivized to come forward with credible information about potential violations of the U.S. securities laws.”

If you or someone you know has lost money as a result of an investment or Ponzi scheme, please contact Richard Frankowski at 888-741-7503 to discuss your potential legal remedies or complete the contact form.

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