After reporting suspected misconduct internally and then tipping off regulators, a whistleblower is getting a multi-million-dollar payday from the U.S. Securities and Exchange Commission (SEC).
The SEC’s latest whistleblower award of more than US$18 million came after a tip prompted an investigation that resulted in successful enforcement action.
The whistleblower, who first reported internally, provided additional information that saved the regulator time and investigative resources, the SEC said.
“Whistleblowers continue to play an essential role in assisting the agency in detecting misconduct and bringing securities law violators to justice,” said Creola Kelly, chief of the SEC’s Office of the Whistleblower, in a release.
“Today’s whistleblower refused to turn a blind eye to the wrongdoing, reporting misconduct internally and then to the commission.”
However, a second purported whistleblower in the same case was denied an award after the commission ruled that their tip did not contribute to the investigation.
According to the SEC’s order, the second whistleblower argued that they triggered the company’s internal investigation and were told by the company to not report their concerns to the SEC.
Still, they claimed that their role in causing an internal investigation indirectly informed the SEC’s inquiries.
The commission said the information supplied to the internal investigation by the second tipster didn’t make its way to the commission.
“[A]lthough counsel for the company did make presentations to the staff, the company refused to provide the report resulting from its internal investigation and refused to provide any witness summaries or notes compiled during the internal investigation,” the order noted.
As a result, the second claim was denied.