The U.S. Securities and Exchange Commission (SEC) recently announced that it is expecting to pay the biggest whistleblower award that the agency has paid yet. The award exceeds $30 million and is being paid to a foreign whistleblower under Section 922 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank). Chief of the SEC’s Office of the Whistleblower, Sean McKessy, stated:
This award of more than $30 million shows the international breadth of our whistleblower program as we effectively utilize valuable tips from anyone, anywhere to bring wrongdoers to justice. Whistleblowers from all over the world should feel similarly incentivized to come forward with credible information about potential violations of the U.S. securities laws.
Employers should be aware that rewards to whistleblowers have been increasing in amount and in frequency. The SEC reports that in 2012 it paid its first reward, it paid four rewards in 2013, and it has paid nine whistleblowers in 2014. The government continues to encourage whistleblowers to come forward while warning employers not to impede a whistleblower from coming forward. In fact, the SEC has indicated that it will target businesses and their in-house attorneys for policies or contracts that prohibit employees from reporting to the agency.
If your business has policies, codes of conduct or employee agreements that may be viewed as preventing whistleblowers from providing information to the SEC, it is time to take corrective action. Let us help you create a system for encouraging whistleblowing within your organization before reporting to the government. Having issues or problems reported internally before being reported externally can save you time, money and heartache.
To protect your company from getting in the crosshairs of the SEC, contact the attorneys at The Swenson Law Firm.