The SEC announced yet another whistleblower award last week, this one for $2.1 million to a former company insider whose information led to enforcement actions. This follows the record-setting whistleblower award paid in March of $83 million.
“The SEC has issued nearly $90 million in whistleblower awards in the past month alone,” noted Jane Norberg, Chief of the SEC’s Office of the Whistleblower. “As these awards demonstrate, we continue to receive high-quality information from whistleblowers, which we use to detect and prosecute securities violations and safeguard investors.”
To-date, the SEC has awarded more than $266 million to 55 individuals under the Dodd-Frank Whistleblower Program. The information provided by these reports has led to nearly $1.5 billion in monetary sanctions against recalcitrant organizations. The Dodd-Frank Whistleblower Program has been a rousing success, and it is widely anticipated that many other awards are in the pipeline awaiting final approval.
The success of the program highlights a key point in the overall fight against not only bribery and corruption but all forms of securities law violations: the public-private role in this battle. In passing the Dodd-Frank Whistleblower Program, Congress recognized that employees closest to the events could be one of the SEC’s best sources of information. Through the incentive program of paying bounties, the SEC has enlisted some top-notch securities law counsel to help vet and process the information before it even gets to the Commission. This vetting process can only help to get the best and most ripe information in front of the SEC for potential action.
The program has essentially widened the net of information available to the SEC, which can only help in its regulatory and enforcement role going forward. With the Supreme Court narrowing the protections of whistleblowers to only those who report to directly and initially to the SEC, this public-private partnership will only become more important.