The Securities and Exchange Commission(“SEC”) announced last week that it paid out over $3 million to a whistleblower. The payment marks the third highest award since the inception of the Office of the Whistleblower, which was established to administer the SEC’s whistleblower program in 2011. According to the SEC press releasethe “whistleblower’s specific and detailed information comprehensively laid out the fraudulent scheme which otherwise would have been very difficult for investigators to detect.”Andrew Ceresney, Director of the SEC’s Division of Enforcement stated that “By providing significant financial incentives for people to come forward, the SEC’s whistleblower program continues to be profoundly effective in helping us protect investors and hold wrongdoers accountable.” By law the SEC protects information that may reveal a whistleblower’s identity.According to Sean X. McKessy, Chief of the Office of the Whistleblower, his “ office continues to receive thousands of whistleblower tips each year. When those tips bear fruit, those individuals, like today’s whistleblower, may receive significant financial awards.” The whistleblower program has paid out nearly $50 million to 18 whistleblowers since its launch. The SEC made its largest payment of $30 millionin 2014. The payments are funded by an investor protection fund established by Congress that is financed entirely through monetary sanctions paid to the SEC by securities law violators.For more information on this and other related subjects, please contact us at info@jackolg.com or (619) 298-2880.
