The U.S. Securities and Exchange Commission announced another whistleblower award today. The reward of more than $325,000 went to a former employee of an investment firm who tipped the agency to detailed information of wrongdoing and specifically identified the individuals behind the fraudulent activity.
As part of its press release, the SEC urged whistleblowers to come forward immediately rather than wait to secure other employment before reporting evidence of misconduct. The whistleblower award proceeding determination cited the delay as its reason for decreasing the percentage of the award to the individual responsible for alerting the government to the misconduct. The Dodd-Frank Act provides for a number of factors, including this one, which the award committee can review while determining that an increase and decrease of the percentage is warranted.
Once again, the SEC did not identify the individual or the enforcement action as part of its announcement, redacting elements of the proceeding decision which might have led to the identification of the whistleblower. The SEC is obligated to protect the confidentiality of its whistleblowers unless certain limited circumstances requiring their disclosure arise.
The SEC has now paid more than $54 million to 22 individuals under its whistleblower program. The program was authorized by Congress following the financial crisis as part of the Dodd-Frank Act in 2010.
The CFTC program, which was created at the same time, has only paid out two awards. But the Director of the CFTC Whistleblower Office promised this summer that a handful of awards, including some with the potential for large payouts, were coming.