Every year, the Securities and Exchange Commission reports on the results of its whistleblower programme. Besides seeing some landmark rulings, 2015 has been another year of breaking records, which shows that the programme keeps growing. The SEC received 4,000 tips in 2015 from every US state, but also from 61 countries outside the US. In total, the SEC awarded USD 37 million to whistleblowers in 2015.
The statistics and landmark rulings are clear signs that the SEC will continue to stimulate whistleblowers to come forward and report misconduct to the SEC. By rewarding whistleblowers, protecting their confidentiality, and acting against potential restrictions on reporting, the SEC looks set on continuing to expand the whistleblower programme and fight corporate crime.
For several years now, the Dodd-Frank Whistleblower Program has proven to be a highly effective measure against corporate crime, according to the SEC. Year after year, the SEC receives more and more whistleblower tips; the number increased in 2015 by more than 8% compared to 2014. The total number of more than 4,000 tips led to over 150 whistleblower awards totalling USD 37 million.
2015 was the year of several landmark rulings. The highest whistleblower award ever of USD 30 million was issued to a whistleblower who provided original information which would not have been obtained otherwise and led to successful enforcement action. The SEC stated that the amount would have been even larger had the whistleblower not hesitated to report. This was also the case in a recent whistleblower award when the SEC explicitly stated that the award was reduced because of unreasonable delay.
The SEC also awarded a whistleblower the maximum payment of 30% of amounts collected for the first time. Because the whistleblower suffered unique hardship as a result of his reporting, the SEC decided to send out a strong message to companies not to retaliate against whistleblowers.
Simultaneously, the SEC brought its first enforcement action against restrictive agreements. Finding that restrictive language in confidentiality agreements could have the effect of discouraging whistleblowers from reporting to the SEC, the company settled for an amount of USD 130,000.