Whistleblowing

Another Mysterious SEC Whistleblower Reward

We received another glimpse into the Securities and Exchange Commission’s thinking about whistleblowers on Friday—although as usual with SEC, details are sketchy and the main thought is “we support whistleblowers as expansively as possible.” Compliance officers, take note.

The glimpse came in the form of a $3.5 million whistleblower reward issued on Friday. To whom? We don’t know. Against what firm, or for what type of misconduct? Unclear. Apparently, the media had already reported on potential misconduct at the company (yay media!) and the SEC had already opened an investigation. That led the whistleblower to provide his own information about said misconduct.

This is where the case gets interesting—or, as interesting as possible for a situation where the SEC discloses so little. SEC whistleblower staff reviewed the whistleblowers claim and decided that yes, the information was credible; but no, the person was not eligible for a reward, because his tip did not lead the SEC to open an investigation or lead to the success of the probe the SEC had already launched.