SEC Whistleblower Reward Program

April 22, 2015

The SEC announced a whistleblower award of roughly $1.5 million to a compliance officer who had a reasonable basis to believe that disclosure to the SEC was necessary to prevent imminent misconduct from causing substantial financial harm to the company or investors.  This is the second award the SEC has made to an employee with internal audit or compliance responsibilities.  Whistleblower Insider

April 1, 2015

Houston-based global technology and engineering firm KBR Inc.agreed to pay a $130,000 penalty to settle SEC charges of violating whistleblower protection Rule 21F-17 under the Dodd-Frank Act which prohibits confidentiality agreements that discourage protected whistleblowing activity.  It is the SEC’s first enforcement action against a company for using improperly restrictive language in confidentiality agreements with the potential to stifle the whistleblowing process.  At issue was KBR’s requirement that witnesses in certain internal investigations sign confidentiality statements with language warning that they could face discipline and even be fired if they discussed the matters with outside parties without the prior approval of KBR’s legal department.  As part of the settlement, KBR amended its confidentiality statement by adding language making clear that employees are free to report possible violations to the SEC and other federal agencies without KBR approval or fear of retaliation.  Whistleblower Insider

September 22, 2014

The SEC announced an expected whistleblower award of more than $30 million.  It will be the largest award to date under the SEC whistleblower program established in 2012 under the Dodd-Frank Act.  It surpasses the $14 million award the SEC made roughly a year ago.  The new award will also be the fourth award to a whistleblower living in a foreign country.  Whistleblower Insider

August 29, 2014

The SEC announced a whistleblower award of more than $300,000 to a company employee who performed audit and compliance functions and reported wrongdoing to the SEC after the company failed to take action when the employee reported it internally.  It is the first award for a whistleblower with an audit or compliance function at a company.  This particular whistleblower award recipient reported concerns of wrongdoing to appropriate personnel within the company, including a supervisor.  But when the company took no action on the information within 120 days, the whistleblower reported the same information to the SEC.  SEC

July 31, 2014

The SEC announced an award, under the whistleblower provisions of the Dodd-Frank Act, of more than $400,000 for a whistleblower who reported a fraud to the SEC after the company failed to address the issue internally.  SEC

June 16, 2014

Albany, N.Y.-based hedge fund advisory firm Paradigm Capital Management and owner Candace King Weir agreed to pay $2.2M to settle charges of engaging in prohibited principal transactions and then retaliating against the employee who reported the trading activity to the SEC.  This is the first time the SEC has filed a whistleblower retaliation case under its new authority to bring such enforcement actions under the Dodd-Frank Act.  SEC