Award Winning Attorneys
SEC Whistleblower Program
News & Insights
The SEC announced today that it would award between $5 million and $6 million to a whistleblower whose detailed information led the SEC to uncover securities violations which would have been “nearly impossible to detect” without the company insider’s help. The award is the third highest ever granted under the SEC whistleblower program since the program’s inception in 2011, and closely follows another whistleblower award of over $3.5 million granted last week.
Today’s award epitomizes the specific strengths of the SEC Whistleblower Program—strengths which are inherent in the program’s very design. Following the financial crisis, I was fortunate to have a leadership role in the development of the SEC Whistleblower Program, and my colleagues and I understood the necessity of empowering insiders who had first-hand, detailed, and actionable intelligence. As this case illustrates, given the vast scope and complexity of our financial markets, products and transactions, corporate wrongdoing can be difficult to detect, investigate, and prosecute without assistance from insiders.
As we wrote previously regarding last week’s award, the crucial value of insider intelligence is not to be underestimated. Neither financial services professionals nor the industry are fundamentally unethical, but the culture within the financial services industry has led too many otherwise ethical people to feel powerless against illegal or unethical behavior. Through the SEC whistleblower program, the government has effectively deputized every insider, and empowered them to act. As we are witnessing, because of the program’s significant protections and incentives, truth-tellers are coming forward in larger and larger numbers and fraudsters are finding it very difficult to hide.