August 31, 2016

Another Whistleblower Hits the Jackpot. . .

Yesterday, the SEC announced the second largest whistleblower award in its history – more than $22 million. This award was topped only by a $30 million award made in 2014.  The press release announcing the award said that the individual’s “detailed tip and extensive assistance helped the agency halt a well-hidden fraud at the company where the whistleblower worked.”

Media reports quickly identified the enforcement action giving rise to the award, but the SEC closely guards whistleblower confidentiality, so neither the announcement nor the SEC’s order said anything about the matter.

The SEC’s order did note that the claimant decided “not to contest” the award – definitely a good call there, claimant!

SEC: More Than $100M in Whistleblower Awards Since 2011

The SEC followed up this news by announcing that more than $100 million in awards had been paid since the whistleblower program’s inception in 2011.  The announcement went on to highlight several other program metrics:

– The Whistleblower Office has received more than 14,000 whistleblower tips from individuals in all 50 states and the District of Columbia and 95 foreign countries.

– Tips from whistleblowers have increased from 3,001 in fiscal year 2012 – the first full fiscal year that the Whistleblower Office was in operation – to nearly 4,000 last year, an approximately 30 percent increase.

– More than $107 million has been awarded to 33 whistleblowers, with the largest being more than $30 million.

– The assistance provided by these whistleblowers enabled the SEC to bring enforcement actions involving more than $504 million in sanctions, including more than $346 million in disgorgement and interest for harmed investors.

The announcement also noted actions that the SEC has taken to protect whistleblowers, including the recent enforcement proceedings involving provisions in confidentiality and severance agreements that deterred whistleblowing.

The SEC accompanied this announcement with a “Top Ten List” containing information about the 10 largest awards, the whistleblower process, and the number of tips received from each state.

More on “The Mentor Blog”

We continue to post new items daily on our blog – “The Mentor Blog” – for members. Members can sign up to get that blog pushed out to them via email whenever there is a new entry by simply inputting their email address on the left side of that blog. Here are some of the latest entries:

– Restatements Hit a New Low
– ISS’ “2016 Board Practices Study”
– Is Tracking Stock Making a Comeback?
– Audit Report Transparency: Netherlands Trumps US – Hands Down
– Omnicare Applied to Audit Reports

John Jenkins