June 15, 2016 | Posted By: Hoyer Law Group, PLLC
Last week, the Securities and Exchange Commission (“SEC”) announced that it issued a whistleblower award of $17 million to an anonymous whistleblower. The award is the second-largest whistleblower award since the program started five years ago. The largest award came in September 2014, when the SEC awarded more than $30 million to a whistleblower for providing key information that led to a successful SEC enforcement action.
The SEC’s Whistleblower Program was established under a provision of the Dodd-Frank Act. Whistleblowers who provide unique and useful information to the SEC can be awarded 10% to 30% of the SEC’s recovery when that recovery exceeds $1 million.
The SEC did not reveal the whistleblower’s identity, which can remain confidential under the law, but said that the individual provided a “detailed tip [that] substantially advanced the agency’s investigation,” and subsequent enforcement action.
Andrew Ceresney, director of the SEC’s enforcement division, said in the statement that the whistleblower’s information helped his staff “to conserve time and resources, and gather strong evidence supporting our case.”
Since its inception, the SEC Whistleblower Program has thus far awarded $85 million and if the last month is indicative of a trend, then that number should increase rapidly. As Sean X. McKessy, Chief of the SEC’s Office of the Whistleblower, added in the SEC’s press release:
In the past month, five whistleblowers have received a total of more than $26 million, and 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.