A compliance professional-turned-whistleblower who ran into trouble trying to report misconduct internally has now been rewarded for taking the information to the U.S. Securities and Exchange Commission (SEC).
The SEC has paid that whistleblower US$450,000 — marking the third time the commission has awarded a tipster who worked in a compliance or internal audit role within the company where the misconduct occurred.
The commission noted that the whistleblower was eligible for an award because they first reported internally and waited the required 120 days before also alerting the SEC. The tipster also provided “significant information” that “helped focus an ongoing investigation on the violations that were ultimately charged.”
“To ensure that important information about securities laws violations is reported to the SEC when appropriate corrective action is not taken by the company, the rules permit awards to compliance professionals in certain limited circumstances,” said Jane Norberg, chief of the SEC’s Office of the Whistleblower, in a statement.
“Here, the whistleblower made reasonable efforts to work within the company’s compliance structure, suffered unique hardships as a result, and reported to the commission after the requisite time period had passed, ultimately providing meaningful assistance to the commission’s investigation and subsequent enforcement action,” she said.
The SEC has now paid over US$396 million to 77 whistleblowers since its initiative that pays financial awards launched in 2012.