The SEC recently announced its largest expected award yet – $30 million – to a whistleblower living in a foreign country who provided key original information that led to a successful SEC enforcement action. This is the fourth award to a whistleblower living in a foreign country, demonstrating the program’s international reach.
The SEC’s whistleblower program rewards high-quality, original information that results in an SEC enforcement action with sanctions exceeding $1 million. Whistleblower awards can range from 10 percent to 30 percent of the money collected in a case. By law, the SEC protects the confidentiality of whistleblowers and does not disclose information that might directly or indirectly reveal a whistleblower’s identity. The previous high for an SEC award to a whistleblower was $14 million, which was announced in October 2013. The SEC awarded its first whistleblower under the program following its inception in fiscal year 2012. The program awarded four more whistleblowers in FY 2013, and has awarded nine whistleblowers in FY 2014.
Forbes correctly points out that there are many things we don't know about this whopping $30 million award. As Forbes writes, "We don’t know if the company had an internal reporting process in place or whether it was used. We don’t know if the company had any elements of an effective compliance program such as strong policies, role-relevant training, and auditing and monitoring for effectiveness and compliance. And, we don’t know the role of their external auditors. All of this is relevant and critical information for in-house counsel and compliance and ethics professionals who are anxious for more specific guidance on what to include in their ethics and compliance programs to improve their effectiveness, and to ensure they meet regulatory expectations."
When the SEC provides specific direction and guidelines, companies can take decisive action–and make strategic investments in compliance programs. Here's hoping that information will come sooner rather than later.