SEC Whistleblower Office Issues First Award

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The Securities and Exchange Commission announced on Tuesday that an anonymous tipster was eligible to receive the first award paid under its Dodd-Frank mandated whistleblower program. While the Commission has initially awarded only $50,000 to the whistleblower, the award could grow substantially as the government collects additional court-ordered sanctions in the case. Significantly, this sum represents the largest award (30% of the recovery) permissible under the whistleblower program. In line with the aggressive posture taken by federal regulators and prosecutors over the past few years, Sean McKessy, Chief of the SEC’s Whistleblower Office, declared that “we are open for business.”

The SEC has reported that it currently receives approximately eight whistleblower tips per day. And, according to the Commission, tips like the one provided by the whistleblower receiving the award yesterday are saving the government time and money, and preventing investors from being “victimized.” Indeed, in announcing the award on Tuesday, the Commission characterized the whistleblower program as an unabashed “success.”

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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