Yesterday, the Securities and Exchange Commission announced its largest award to date to w foreign whistleblower who revealed an ongoing financial fraud which “would have been very difficult to detect,” according to Andrew Ceresney Director of the SEC’s enforcement division.
This came just a week after Attorney General Eric Holder said he wanted to boost payouts to motivate whistleblowers to submit information about financial wrongdoing.
The difference between the SEC program and other whistleblower programs is that the tipster can retain their anonymity and file through their counsel without fear of disclosure. The False Claims Act doesn’t allow for this. It is thought that this will allow whistleblowers to retain their positions within companies violating laws by committing fraud on investors.
The other difference is that the Government does not have to have been defrauded. Indeed, this program protects financial investors not Uncle Sam, although some would argue that it maintains the integrity of Wall Street and in so doing protects our economy.
Interestingly, the $30 million award could have been bigger had the tipster acted more swiftly. The SEC stated that it reduced the award because the whistleblower delayed reporting the misconduct after first learning of it.
Non U.S. residents with such inside information should benefit from this award as the whistleblower was not an American citizen. So far there have been 14 major awards and of those 4 lived abroad according to the SEC. Last year an award of $14 million was paid for a tip about an alleged Chicago scheme to defraud US investors seeking U.S. residency.
Jeffrey Newman represents whistleblowers.