Whistleblower Law Blog
SEC Paid $37 Million to Whistleblowers in FY 2015
Fiscal 2015 was arguably the most successful year in the short history of the whistleblower program at the Securities & Exchange Commission: In the 12 months ended September 30, almost 4,000 tips were received from whistleblowers around the world — a record number — and more than $37 million was paid out in rewards.
The whistleblower program was created by the Dodd-Frank Act of 2010: Under the statute, people who report securities violations may be eligible for a reward if the SEC uses their information to recover more than $1 million for taxpayers.
The 2015 tallies are reported in the SEC program’s new annual report. Beyond the monetary rewards being paid to whistleblowers, the report highlights a number of steps taken by the SEC to help insiders who share information about corporate wrongdoing.
As an example, the SEC is cracking down on companies that use confidentiality and severance agreements to block employees from reporting wrongdoing to the SEC. On April 1, 2015, the SEC brought an enforcement action against KBR, Inc., finding that its confidentiality agreements ran afoul of a rule that prevents companies from “impeding an individual from communicating directly with the Commission staff about a possible securities law violation.”
This was a big win for whistleblowers who are operating under strict confidentiality agreements — but still want to report wrongdoing.
The biggest news, however, was the sheer volume of tips that the SEC is receiving from whistleblowers — and the growing amount of money it is paying out. Whistleblowing can be a lonely affair, but SEC whistleblowers are hardly alone: Literally thousands of people are standing up for honesty, and the SEC is listening.
To learn more about the SEC’s whistleblower program, please visit our firm’s SEC Whistleblower site.