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The First SEC WhistleBlower Gets a Second Payout

The First SEC WhistleBlower Gets a Second PayoutThe SEC whistleblower who first received an award payout under the Dodd-Frank program more than two years ago, will collect an additional $150,000 thanks to more funds recovered in the case.

This whistleblower, not yet identified in order to protect confidentiality, has now been paid about $200,000. The first Dodd-Frank award was announced in August 2012. This whistleblower helped the SEC stop a multi-million dollar fraud. He/she provided documents and other information that allowed the agency's investigation to move quickly and prevent more victims from being harmed.

The original award given to this whistleblower was 30 percent of the amount collected in the SEC enforcement action against the fraudsters. That's the maximum percentage allowed under the Dodd-Frank Act of 2010.

This latest payout comes from a $500,000 penalty the agency collected from one of the defendants in the case. Other defendants are paying on a court-ordered schedule.

According to Sean McKessy, chief of the SEC's Whistleblower Office, "this latest payment shows that the SEC's aggressive collection efforts pay dividends not only for harmed investors but also for whistleblowers." As we collect additional funds from securities law violators, we can increase the payouts to whistleblowers."

Under Dodd-Frank, the SEC's whistleblower program rewards individuals who offer high-quality original information that leads to an SEC enforcement action in which more than $1 million in sanctions is ordered.

Awards can range from 10 to 30 percent of the money collected.

Integration of a whistleblower hotline is powerful tool to help manage risk.

Waste, fraud and abuse of authority can all be combated by having an independent reporting mechanism that’s available to your employees to report malfeasance. WhistleBlower Security should be one of the first places your employees can go to report on any perceived wrongdoing or perceived risk.

Get started on your FCPA compliance today. Download a free copy of our new eBook 5 Steps to Communicate Your Ethics Reporting Program.

eBook: 7 Steps to Communicate Your Whistleblower Hotline

photo Amanda Nieweler
About the Author
Amanda writes for WhistleBlower Security about ethics, compliance, workplace culture, and whistleblower hotlines. Amanda brings her nearly two decades of risk and compliance experience to the WBS blog where she is dedicated to helping people and companies promote speak-up cultures.