Wednesday, the SEC announced that it would pay an unidentified compliance officer a whistleblower bounty award of between $1.4 and $1.6 million. This is the second award that the SEC has made to a whistleblower with internal audit or compliance responsibilities. According to the SEC, the recipient of the bounty award “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.”

Andrew Ceresney, Director of the SEC’s Division of Enforcement, stated in the announcement that the 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.” Mr. Ceresney noted that the SEC’s rules “permit compliance officers to receive an award for reporting misconduct to the SEC” when investors or the market could suffer substantial financial harm.

Since its inception in 2011, the SEC’s whistleblower program has paid more than $50 million to 16 whistleblowers who provided the SEC with “unique and useful information that contributed to a successful enforcement action.” In August 2014, the SEC announced its first whistleblower award to a compliance employee — a $300,000 award to an employee who performed “audit and compliance functions and reported wrongdoing to the SEC after the company failed to take action when the employee reported it internally.”

The SEC has made clear that employees who perform audit and/or compliance functions are eligible to receive bounty awards and may not be precluded from communicating with the SEC about potential securities violations. With this award, the SEC is sending the message that companies should effectively address internal reports of misconduct, whether it be from a compliance officer or other employee.