SEC Awards $1.5 Million to Compliance Officer

On April 22, 2015, the U.S. Securities and Exchange Commission announced its second-ever whistleblower award to a compliance professional. The SEC’s award demonstrates that compliance professionals and other fiduciaries can be whistleblowers when the employer fails to take action to address misconduct reported by a fiduciary.

The complainant, in his role as a fiduciary, was statutorily required to disclose the suspected misconduct internally and then wait 120 days for the employer to investigate and take corrective measures before initiating an action under the SEC’s whistleblower award program. Here, the complainant did as required, and the SEC found that the employer did not take meaningful corrective action. The SEC held the financial award to the whistleblower was appropriate given the employer’s failure to remediate.

The SEC’s first ever award to a whistleblower was in 2014. The SEC releases limited information about whistleblower case as it is bound by the law to protect the confidentiality of whistleblowers.

Tagged: Enforcement Bodies, Securities and Exchange Commission (SEC), Whistleblower Laws (Federal)