The Securities and Exchange Commission (“SEC”) announced earlier this week that it expected to issue an award of over $30 million to a single anonymous whistleblower for original information the whistleblower provided that led to an SEC enforcement action. The award represents the SEC’s largest whistleblower award since the SEC whistleblower program started four years ago. In a press release issued by the agency, Sean McKessy, the Chief of the SEC’s Office of the Whistleblower, stated: “This award of more than $30 million shows the international breadth of our whistleblower program as we effectively utilize valuable tips from anyone, anywhere to bring wrongdoers to justice. Whistleblowers from all over the world should feel similarly incentivized to come forward with credible information about potential violations of the U.S. securities laws.”
The SEC provided little information about the whistleblower or the company engaged in the fraud that formed the basis of the whistleblower’s tip. This is by design. The whistleblower chose to remain anonymous, and even revealing the company in which the whistleblower identified fraud could serve to expose the whistleblower’s identity. The agency’s actions demonstrate its willingness to protect whistleblowers’ privacy to the extent possible.
The award is yet another sign that the SEC Whistleblower Program is continuing to grow. The SEC noted in its press release that it has already awarded nine whistleblowers in FY 2014. That number is expected to continue to grow in coming years, as valuable tips that were brought at the outset of the program materialize into successful enforcement actions.
Earlier this week, Katz, Marshall & Banks partner David J. Marshall released his SEC Whistleblower Practice Guide, designed to help whistleblowers and their counsel prepare effective tips that will protect investors while also earning financial awards for helping to enforce the nation’s securities laws. If you have information concerning financial fraud that you are considering reporting, or if you have already reported fraud and are facing retaliation, contact Mr. Marshall and the experienced attorneys at Katz, Marshall & Banks for a confidential evaluation of your case with no further obligation.