On January 15, 2016, the Securities and Exchange Commission’s Office of the Whistleblower (“OWB”) announced the award of more than $700,000 to a “company outsider who conducted a detailed analysis that led to a successful SEC enforcement action.” This award is significant because the whistleblower provided independent analysis to the SEC, rather than inside information of wrongdoing.
The OWB’s press release emphasized that the bounty program is not limited to corporate employees with inside information, quoting Sean X. McKessy, Chief of the OWB, as stating: “This award demonstrates the Commission’s commitment to awarding those who voluntarily provide independent analysis as well as independent knowledge of securities law violations to the agency. We welcome analytical information from those with in-depth market knowledge and experience that may provide the springboard for an investigation.”
As we discussed in our recent post on the SEC’s 2015 Annual Whistleblower Report, only approximately half of the OWB bounty award recipients have been current or former employees of the company about which they reported information of wrongdoing. Therefore, company outsiders are clearly important sources for the SEC and the announcement of the OWB’s most recent award will no doubt incentivize others to provide their independent analysis of securities law violations to the SEC.