SEC Awards over $4 Million to Foreign National for Whistleblower Tip
Commentary by Steven Lofchie
The SEC awarded more than $4 million to a former company insider for providing a tip and continued assistance that led to a successful enforcement action.
According to the SEC, the whistleblower is a foreign national working outside the United States who alerted the SEC to the existence of the securities law violation. The SEC noted that the positive award considerations were somewhat offset by the whistleblower's "unreasonable delay in reporting the misconduct."
SEC Office of the Whistleblower Chief Jane Norberg said that the case demonstrates the "breadth of the SEC's whistleblower program."
Commentary
The SEC's Order says that the whistleblower was a former company insider who alerted the Commission to a "widespread, multi-year securities-law violation." The Order also states that there was an "unreasonable delay [by the whistleblower] in reporting the misconduct to the Commission." This suggests a disgruntled former corporate officer who may have been involved in, or at least aware of, the wrongdoing, but decided to report it after he was fired. If that is the case, it is hard to feel good about such a person being paid over million dollars.