The Securities and Exchange Commission has awarded nearly $2.5 million to a government employee whose whistleblower tips helped regulators launch an investigation and ultimately clamp down on a company’s misconduct.
The whistleblower award, which the SEC announced on July 25, was the first time the agency has ever paid a whistleblower bounty to a government employee. The SEC makes its whistleblower announcements vague in detail to protect the identity of the whistleblower.
According to the Daily Report, the SEC took the unusual step of providing in its order’s footnotes a detailed explanation of when a government employee can and can’t receive a whistleblower award under the rules of the Dodd-Frank Act.
For the most part, government employees are excluded from receiving whistleblower awards unless they are employed in a financial regulatory agency or law enforcement agency. “Neither of the two exceptions prevents an award here,” the footnote said, the Daily Report said, adding that there was a question of interpretation in the law enforcement exception that was eventually resolved in the whistleblower’s favor.
Sean McKessy, who served as the first director of the SEC’s whistleblower office before joining a private firm, told the Daily Report that this particular award augurs well for future SEC whistleblowers.
“The first tea leaf we’re reading is that, when given the opportunity to interpret something as pro-whistleblower, the current commission—with the new chairman—has signed off on that,” Mr. McKessy told the Daily Report. “For people in my shoes, that’s encouraging.”
Jane Norberg, the current head of the SEC’s whistleblower office, said that whistleblowers can “provide a wealth of information and ongoing assistance that helps our agency bring enforcement actions quicker and more efficiently.”
”This whistleblower not only helped us open the case, but also provided timely ongoing assistance along with critical documents and testimony that accelerated the pace of our enforcement action,” Ms. Norberg said.
Since its inception in 2011, the SEC’s Office of the Whistleblower has awarded $156 million to 45 whistleblowers who voluntarily provided the agency with original and useful information that led to a successful enforcement action.
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Are you aware of fraud being committed against the federal government, or a state government? If so, you may be protected and rewarded for doing the right thing by reporting the fraud. If you have any questions about whether you qualify as a whistleblower, please contact an attorney at Beasley Allen for a free and confidential evaluation of your claim. There is a contact form on this website, or you may email one of the lawyers on our whistleblower litigation team: Archie Grubb, Larry Golston, Lance Gould or Andrew Brashier.
Source: The Daily Report