SEC Announces Award to Whistleblower (with Lofchie Comment)

The SEC announced an award of over $400,000 to a whistleblower who reported fraud to the SEC after a company failed to address an internal issue.

Lofchie Comment: At last, a deserving whistleblower. As a general matter, it should be inappropriate to award whistleblowers who do not first attempt to correct matters internally, except perhaps in instances in which they would be at physical risk. In this case, the SEC press release states that "The whistleblower had tried on several occasions and through several mechanisms to have the matter addressed internally at the company. . . . The whistleblower did everything feasible to correct the issue internally. . . ."

See: SEC Press Release; SEC Order. See also: Whistleblower Specialty Page (available to Cabinet subscribers only).