May 28, 2019

SEC awards $4.5 million to whistleblower who first reported internally

The Securities and Exchange Commission announced on May 24 that for the first time it was providing an award to a whistleblower who initially reported alleged wrongdoing internally rather than to the SEC.  Specifically, the whistleblower sent an anonymous tip to the company that led to an internal investigation by the company.  The company reported the allegation and the findings of its internal investigation to the SEC.  Separately, the whistleblower also communicated the allegations to the SEC and another unnamed government agency after initially reporting the allegation internally to the company.  

The SEC stated that it did not communicate with the whistleblower, but that the rule for awarding monetary rewards to a whistleblower was satisfied by the Company’s report to the SEC.  Based on the Company’s report, the SEC ultimately resolved two enforcement actions.  For providing this information, the SEC has preliminarily determined that the whistleblower should receive an award of more than $4.5 million.  

SEC press release | SEC order