Recent Whistleblower Award: Timing Matters

The SEC just announced another whistleblower award, granting more than $325,000 to a former investment firm employee whose tips led to a successful enforcement action. This award, like the $30 million award granted to a whistleblower last year, came with a caveat: the whistleblower could have received a larger award, if not for a delay in reporting. While the whistleblower waited to report the misconduct until after leaving the firm, whistleblowers are provided significant employment protections to encourage the timely reporting of misconduct. Speaking to this, Enforcement Division chief Andrew Ceresney noted that the program encourages tipsters to come forward in order to “prevent misconduct from continuing unabated while investors suffer more harm.” 

While deciding to blow the whistle is a complex decision, timing matters. Sometimes, a cursory submission, followed by a more lengthy and detailed submission, may be in a whistleblower’s best interest. And, whistleblowers who fear retaliation may wish to consult an attorney to explore the anonymity protections afforded by Dodd-Frank’s program when individuals work with a whistleblower advocate.