The Securities and Exchange Commission awarded more than $300,000 to a whistleblower with auditing responsibilities who helped lead to the successful enforcement of SEC and related actions.
The whistleblower became aware of a potential securities law violations in connection with their audit responsibilities. Individuals with audit or compliance responsibilities are usually not eligible for such SEC awards, but a whistleblower who reasonably believes that an entity is acting in a way that would impede an investigation is an exception to the rule. In this case, the whistleblower had reason to believe that the entity in question would impede the commission’s investigation. This marks the fourth instance the SEC has paid a whistleblower with internal audit or compliance-related responsibilities.
“This award is an example of the important role that audit and compliance professionals can play in assisting the commission’s enforcement efforts, especially when the entity is attempting to thwart an investigation,” said Jane Norberg, chief of the SEC’s Office of the Whistleblower, in a statement. “The whistleblower attempted to remedy the conduct and provided exceptional assistance to the enforcement staff.”
All payments through the whistleblower program are made out of an investor protection fund established by Congress that is financed entirely through monetary sanctions paid to the SEC by securities law violators. Awards are only given to whistleblowers who voluntarily provide the SEC with original, timely and credible information that leads to a successful enforcement action; they can range from 10 to 30 percent of the money collected when the monetary sanctions exceed $1 million.
Due to the Dodd-Frank Act, the SEC protects the confidentiality of whistleblowers and does not disclose any information that could reveal a whistleblower’s identity.
More information on the SEC’s whistleblower program can be found on their site here.