On April 22, 2015, the Securities and Exchange Commission (SEC) announced an award between $1.4 and $1.6 million to a compliance officer who provided information that assisted the SEC in a successful enforcement action that resulted in sanctions exceeding $1 million. This marks the second time that an employee with internal audit or compliance responsibilities has received an award under the SEC’s whistleblower program. The SEC announced the first such award on March 2, 2015. The SEC indicated that the recipient of the award “had a reasonable basis to believe that disclosure to the SEC was necessary to prevent imminent misconduct from causing substantial financial harm to the company or investors.”
Andrew Ceresney, the director of the SEC’s Division of Enforcement, in commenting on the award, declared that “When investors or the market could suffer substantial financial harm, our rules permit compliance officers to receive an award for reporting misconduct to the SEC.” Mr. Ceresney further stated that this particular compliance officer “reported misconduct after responsible management at the entity became aware of potentially impending harm to investors and failed to take steps to prevent it.” This most recent award, the second of its kind in less than two months, should serve as a reminder that even employees with internal audit or compliance responsibilities can be whistleblowers.