SEC Makes Whistleblower Award to Company Outsider
The Securities and Exchange Commission continues to demonstrate its strong commitment to the agency’s whistleblower program. This past year was a record-breaking year by every measure, not the least of which was the roughly $175 million in awards the SEC doled out to 39 whistleblowers. And just three weeks ago, the SEC made its largest award ever of $114 million, shattering the previous record $50 million award the agency made in June.
Last week, the SEC has done it again with its most recent award. Not with the size of the award, a relatively paltry $1.1 million. But to whom the award was made. It went to a company outsider “whose independent analysis led the staff to look at new conduct during an ongoing investigation.”
Company outsider, independent analysis, ongoing investigation. Not the characteristics of your typical whistleblower scenario. Nor do they make up the type and timing of the whistleblower from which enforcement agencies are most interested in hearing. In fact, they are the ones most often treated with skepticism and even hostility at times, with both their motives and the value of their contribution put into question.
Well, with this latest award, the SEC has made it very clear it sees this kind of whistleblower very differently and just as valuable as the company insider who was there “in the room” or otherwise has direct evidence of the fraud. SEC Whistleblower Chief Jane Norberg went out of her way to highlight her agency’s point of view:
Today’s award reflects the Commission’s commitment to award whistleblowers who provide high-quality independent analysis. Whistleblowers who devote time and effort to develop unique insights may afford the Commission important information about possible securities law violations.
The SEC’s Order issuing the award spelled this out even further. First, it recognized the whistleblower’s information was based on an independent analysis which is described as a “constituent element of ‘original information.’” Second, it explained that the whistleblower “examined and evaluated publicly available materials that provided important insight into possible securities violations that were not apparent from the face of the public materials themselves.”
All this is to say you can be a company insider with the smoking gun evidence or a company outsider able to put the pieces together from what is already in the public domain. Either way, the SEC wants to hear from you.
So if you believe you might have useful information regarding potential securities fraud violations and would like to speak to an experienced member of the Constantine Cannon whistleblower lawyer team, please do not hesitate to contact us. We have said it before and we will say it again — when it comes to whistleblowers reporting to the SEC, there has never been a better time to say something if you see something.
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