The sound of a whistle on Wall Street blew loudly this week for one informative whistleblower. What did that whistle sound like? It sounded like $20 million.
On November 14, 2016, the Securities and Exchange Commission (“SEC”) announced an award of more than $20 million to a whistleblower who gave valuable information that enabled the SEC to initiate an enforcement action against wrongdoers before the wrongdoers squandered the money. The $20 million award is the third-highest since the SEC’s whistleblower program issued its first award in 2012.
Under the SEC whistleblower rules, the SEC protects the confidentiality of whistleblowers and does not disclose information that might directly or indirectly reveal a whistleblower’s identity. This is why the details in almost all news releases regarding a whistleblower award are sparse. Even the SEC order determining the whistleblower claim is largely redacted. Other whistleblower orders follow suit.
The freedom to blow a whistle on the company is the crux of the whistleblower program. Without the freedom to come forward and disclose information about a bad-acting company, there is no whistleblower program. The SEC takes very seriously instances where a company attempts to silence a whistleblower or retaliates against one.
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 ordered. The award can range anywhere from 10 to 30 percent of the sanctions, according to the website.
The SEC has now awarded more than $130 million to 34 whistleblowers who became eligible for an award by voluntarily providing the SEC with original and useful information that led to a successful enforcement action.
Scott L. Silver, 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 former defense attorneys and government prosecutors now working to protect whistleblowers.
Scott L. Silver and David R. Chase are committed to the protection of whistleblowers through the 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.