An overseas tipster recently helped the SEC take down a large and long-running securities fraud at the whistleblowers former company.
As per policy, the SEC would not identify the individual whistleblower or the specific securities violation they helped to uncover, but they did note the tipster worked for the company where the alleged securities violations took place and they offered to assist the SEC throughout its entire investigation. The SEC also said that the tipster was not a U.S. citizen and worked for the company in an overseas office.
Jane Norberg, chief of the SEC’s Office spoke about the case saying “Company insiders often have valuable information that can help the SEC halt an ongoing securities law violation and better protect investors,” She also spoke about the SEC whistleblower program in general “The breadth of the SEC’s whistleblower program is demonstrated by this case, where the whistleblower, a foreign national working outside of the United States, affirmatively stepped forward to shine a light on the wrongdoing.”
Under the guidelines of the Dodd-Frank Act, whistleblowers that provide accurate and credible information maybe be eligible for bounties worth 10 to 30 percent of the total sanctions collected. These bounties are for tipsters who help SEC bring enforcement actions worth more than $1 million.
The SEC did not confirm what percentage of the enforcement action the whistleblower received but said it took into account the fact that individual was an overseas tipster who continued to offer valuable assistance to the agency even after filing the initial SEC tip.
Speaking about the tipster’s delay in providing the information, the SEC stated “We have not weighed the claimant’s delay as severely as we might otherwise have done due to the existence of several mitigating factors that we find relevant given the particular facts and circumstances of this matter,
Mitigating factors regarding the delay included the fact that the whistleblower’s delay took place before the 2010 launch of the SEC’s bounty program. Secondly, the legal uncertainty overseas tipsters faced, including the fact they may not be protected by Dodd-Frank’s anti-retaliation provisions.
With the latest reward completed, the agency has now awarded bounties totaling more than $20 million to three recent tipsters. On Nov. 30, the agency announced it would pay about $16 million to two whistleblowers who helped it bring a case of corporate misconduct.
Questions about The SEC whistleblower program? The Whistleblower program offers confidentiality, protection from retaliation, and rewards fraud tipsters for reporting wrongdoing that leads to an SEC enforcement action in which over $1 million in sanctions is collected. The award can range anywhere from 10 to 30 percent of the sanctions, according to the website.
Scott L. Silver, the managing partner of the Silver Law Group, was an early proponent of the legislation and authored a primer on the SEC Whistleblower Program. Our legal team includes David R. Chase, a former SEC prosecutor now working to protect whistleblowers.
Silver Law Group and The Law Firm of David R. Chase are committed to the protection of whistleblowers through the SEC whistleblower claim process and can prosecute your whistleblower claims. If you have questions about your legal rights as a whistleblower, please contact Scott Silver of the Silver Law Group for a free consultation at ssilver@silverlaw.com or toll-free at (800) 975-4345.