May 18, 2016

SEC on a roll with $5 million whistleblower award

By Molly Knobler

On the heels of a substantial award last Friday, the SEC has made another whistleblower award of more than $5 million — its third largest to date.  The SEC explained that the $5 to $6 million award will be going to “a company insider whose detailed tip led the agency to uncover securities violations that would have been nearly impossible for it to detect but for the whistleblower’s information.”

This award, to what appears to be a “classic” insider whistleblower, follows closely behind several awards to more non-traditional whistleblowers — outsiders, and those who filed only after the SEC had begun an investigation.  But the SEC was not shy in touting its interest in tips from insiders: “Employees are often best positioned to witness wrongdoing.  When they report specific and credible tips to us, we will leverage that inside knowledge to advance our enforcement of the securities laws and better protect investors and the marketplace.”

With this award, the SEC has now made awards of over $67 million to 29 whistleblowers.  This award is the third largest to date, following behind a $30 million award announced in September 2014 and a $14 million award announced in October 2013.

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