SEC Awards Compliance Officer Approximately $1.5 Million Whistleblower Bounty

Written April 22, 2015 by Robert Lu

On April 22, 2015, the SEC announced that it would pay an unidentified compliance officer a whistleblower bounty award of between $1.4 and $1.6 million. This is the second award that the SEC has made to a whistleblower with internal audit or compliance responsibilities. According to the SEC, the recipient of the bounty 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.”

This current whistleblower bounty underscores the SEC’s position that employees who perform audit and/or compliance functions are eligible to receive bounty awards and may not be precluded from communicating with the SEC about potential securities violations. This award by the SEC sends the message that companies should effectively address internal reports of misconduct, whether from a compliance officer or other employees.

Since its inception in 2011, the SEC’s whistleblower program has paid more than $50 million to 16 whistleblowers who provided the SEC with “unique and useful information that contributed to a successful enforcement action.” In August 2014, the SEC announced its first whistleblower award to a compliance employee — a $300,000 award to an employee who performed “audit and compliance functions and reported wrongdoing to the SEC after the company failed to take action when the employee reported it internally.”

For additional information about the SEC Whistleblower program, or the Firm’s resources in this area, please visit the Robbins Geller Rudman & Dowd LLP Whistleblower page.