The U.S. Securities and Exchange Commission (SEC) announced Thursday it has awarded more than US$17 million to a former corporate employee who provided the regulatory agency with a detailed tip that substantially advanced an investigation and led to enforcement action.
This represents the second-largest whistleblower reward bestowed by the SEC, surpassing a US$14-million payout that was made in 2013. The record remains a US$30 million reward that was paid in 2014. In total, the program has paid out more than US$85 million to 32 whistleblowers since it was launched in 2011.
Under the program, the SEC protects the confidentiality of whistleblowers and does not disclose information that might reveal their identity. “Company insiders are uniquely positioned to protect investors and blow the whistle on a company’s wrongdoing by providing key information to the SEC so we can investigate the full extent of the violations,” says Andrew Ceresney, director of the SEC’s division of enforcement, in a statement. “The information and assistance provided by this whistleblower enabled our enforcement staff to conserve time and resources and gather strong evidence supporting our case.”
Sean McKessy, chief of the SEC’s Office of the Whistleblower, noted that in the past month, five whistleblowers have collectively received more than $26 million. “We hope these substantial awards encourage other individuals with knowledge of potential federal securities law violations to make the right choice to come forward and report the wrongdoing to the SEC,” Kessy adds.
The Ontario Securities Commission (OSC) is planning to introduce its own program that provides whistleblowers with financial rewards later this year.