Blowing the whistle to the Securities and Exchange Commission — even when the SEC is already hot on the trail of the securities wrongdoer — can be quite lucrative. Case in point: the SEC recently announced a whistleblower award of more than $3.5 million to a company employee whose tip “bolstered” its ongoing investigation with additional evidence of wrongdoing, thereby substantially assisting the SEC’s case. In its public release, the SEC made clear that it encouraged whistleblowers to report possible securities law violations even if they think the SEC may already be looking into it.
Andrew Ceresney, Director of the SEC’s Enforcement Division, commented: “Whistleblowers can receive an award not only when their tip initiates an investigation, but also when they provide new information or documentation that advances an existing inquiry.” He continued: “This particular whistleblower’s tip substantially strengthened our ongoing case and increased our leverage during settlement negotiations with the company.”
Under law, the SEC protects whistleblowers’ confidentiality and typically will not disclose information that might directly or indirectly uncover his or her identity.
According to the SEC’s Website, its whistleblower program has to date awarded more than $62 million to 28 whistleblowers since 2011 — the inception of its program. Whistleblowers may be eligible for an award when voluntarily providing the SEC with unique and useful information that leads to a successful enforcement action. Whistleblower awards can range from 10 percent to 30 percent of the money collected, if the monetary sanctions exceed $1 million.
The take away: even where the SEC has already initiated an investigation, it is not too late to blow the whistle and provide “unique and useful” information that can significantly enhance the SEC’s case. It may prove to be worth your while.
David R. Chase, Esq. a former SEC enforcement attorney and securities attorney, heads the Law Firm of David R. Chase, PA, a SEC law firm, that represents whistleblowers in SEC cases throughout the nation, including Miami, Fort Lauderdale, New York City and Boca Raton, Florida. You may contact David for a confidential, cost-free consultation at: 800-760-0912, or by email at: david@davidchaselaw.com. The firm’s website is: securitiesfrauddefense.net.
