SEC Whistleblower to Collect Record-Breaking $30 Million-Plus Award By Tod Aronovitz | 09/26/14 | 0 Comment

Representing the largest award in the history of the Securities and Exchange Commission’s whistleblower program, the agency is expected to pay more than $30 million to an anonymous tipster living abroad. According to the SEC, the whistleblower supplied crucial original information that led to a successful SEC enforcement action.

“This whistleblower came to us with information about an ongoing fraud that would have been very difficult to detect,” said Andrew Ceresney, Director of the SEC’s Division of Enforcement. “This record-breaking award sends a strong message about our commitment to whistleblowers and the value they bring to law enforcement.”

This is the fourth time an SEC whistleblower award has gone to a relator living in a foreign country, demonstrating the program’s reach beyond domestic borders.

“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,” explained Sean McKessy, Chief of the SEC’s Office of the Whistleblower. “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.”

After gaining new powers in the 2010 Dodd-Frank Wall Street reform law, the SEC has been able to sway whistleblowers to come forward by offering monetary rewards for high-quality, original information that results in an SEC enforcement action with sanctions exceeding $1 million. Before the new law, the SEC could only reward people for helping on insider-trading cases. As part of the program, whistleblowers can receive up to 30 percent of the money collected in a case.

However, SEC whistleblower awards in the $30 million-plus range are fairly rare and infrequent. The next highest award by the SEC to a whistleblower was $14 million, announced in October 2013.

The unnamed whistleblower is quoted in a statement as saying, “I was very concerned that investors were being cheated out of millions of dollars and that the company was misleading them about its actions.”

By law, the SEC protects the confidentiality of whistleblowers and does not disclose information that might directly or indirectly reveal a whistleblower’s identity.

An investor protection fund established by Congress supplies the money paid to whistleblowers, at no cost to taxpayers or harmed investors. The fund is financed through monetary sanctions paid by securities law violators to the SEC.

The SEC awarded its first whistleblower under the program following its inception in fiscal year 2012. The program went on to reward four more whistleblowers in FY 2013, and has awarded nine whistleblowers in FY 2014.

By acting as a “whistleblower” in what is known as a “qui tam” lawsuit, a private party may collect up to 30 percent of the amount recovered, depending on how the case is prosecuted.

ARONOVITZ LAW: Miami Whistleblower / Qui Tam Law Firm

The Miami Qui Tam law firm of ARONOVITZ LAW routinely works with whistleblowers to document Medicare fraud and other forms of fraud against the government. Contact Miami Whistleblower / Qui Tam lawyer Tod Aronovitz to discuss your case.