The U.S. Securities and Exchange Commission (SEC) Office of the Whistleblower made its second multi-million dollar award announcement in less than a week on Tuesday, this time awarding over $5 million to a former company insider. According to the SEC, the whistleblower provided a “detailed tip” which allowed the agency to “uncover securities violations that would have been nearly impossible for it to detect but for the whistleblower’s information.”
The agency noted the unique ability of employees to uncover company wrongdoing. According to Andrew Ceresney, Director of the SEC’s Division of Enforcement, “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.”
The agency also noted that the award was the third-highest in the nearly five-year history of the program. Since the SEC Whistleblower Program began in 2011, the SEC has now awarded more than $67 million to 29 whistleblowers. Sean McKessy, Chief of the SEC’s Office of the Whistleblower, stated that the program “has seen tremendous growth since its inception and we anticipate the continued issuance of significant whistleblower awards in the months and years to come.”
The SEC Whistleblower Program was created by the Dodd-Frank Act of 2010. Section 922 of the Dodd-Frank Act empowers the SEC to reward whistleblowers who voluntarily provide original information regarding securities violations between 10 to 30 percent of any monetary recovery of over $1 million that the SEC recovers from wrongdoers as a result of the whistleblower’s information.