A compliance officer is slated to enjoy a US$1 million payday thanks to a whistleblower award from the U.S. Securities and Exchange Commission (SEC).
The SEC said Wednesday it will award between US$1.4 million and US$1.6 million to a compliance professional who provided information about violations at their own company that assisted an SEC enforcement action against the firm. This is the second time the SEC has granted a whistleblower award to an individual that works in compliance who reported to the regulator.
Under the SEC’s whistleblower regime, the specifics of the case cannot be disclosed. However, the regulator reports that 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 SEC’s whistleblower program can pay tipsters between 10% and 30% of the money collected in a successful enforcement action that results in sanctions exceeding US$1 million. Since the program began in 2011, the SEC’s whistleblower program has paid more than US$50 million to 16 whistleblowers.
The Ontario Securities Commission (OSC) is currently considering the adoption of its own whistleblower program that would also pay financial awards. That proposal is out for comment until May 4, and the commission is planning to hold a public roundtable to examine the idea on June 9.