Three compliance practitioners received shares of a more than $1 million whistleblower award announced by the Securities and Exchange Commission (SEC) on Friday.
The whistleblowers waited more than 120 days after reporting the misconduct internally to bring it to the attention of the SEC—an exception that allowed them to become eligible for an award despite Exchange Act Rule restrictions upon compliance employees. The amounts received by each individual were undisclosed in accordance with measures taken to protect the anonymity of those reporting wrongdoing.
The official that received the highest share of the $1 million “provided the most significant and comprehensive information about the conduct to staff that proved vital to the success of the Covered Action,” according to the SEC’s order. The second claimant was the first to report to the SEC, and the third was acknowledged for providing continuing assistance.
Awards for compliance/audit practitioners are a rarity under the SEC’s whistleblower program. At the start of this year, only four had ever been announced despite well over 100 payouts at that point.
Following Friday’s announcement, which included additional bounties of $1.2 million and $350,000 to two other, separate whistleblowers, the SEC has awarded approximately $959 million to 203 individuals since 2012. All award payments are made through an investor protection fund established by Congress and financed by monetary sanctions paid to the SEC by securities law violators.
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