Today, the SEC announced a whistleblower award that may, for two reasons, resonate with potential tipsters and companies that might be reluctant to take decisive action to look into fraud that is reported internally.

 

First, the SEC's award, which it issued to an unidentified whistleblower, was for the not-insignificant amount of $400,000. Second, the SEC specified that the whistleblower "had tried on several occasions and through several mechanisms to have the matter addressed internally at the company." The company, however, failed to address the employee's reports of fraud.

 

Sean McKessy, chief of the SEC’s Office of the Whistleblower, stated that the whistleblower "did everything feasible to correct the issue internally" and only came to the SEC as a whistleblower when it became apparent that the company would not address the issue. “This award recognizes the significance of the information that the whistleblower provided us and the balanced efforts made by the whistleblower to protect investors and report the violation internally,” he stated.

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