SEC Issues $7M Whistleblower Award

The US Securities and Exchange Commission is awarding $7M, to be split between the three whistleblowers who helped the regulator go after an investment scam. This latest whistleblower award, the second issued this year, ups the collective total that the SEC has granted to 41 whistleblowers to $149M.

Of the $7M, about $4M will go to the whistleblower who gave the SEC information that helped start the regulator’s investigation. The other two whistleblowers, who provided additional new information during the probe, will split the $3M.

To date, SEC enforcement actions resulting from whistleblower tips have led to over $935M in financial remedies. Whistleblowers who provide the tips that lead to successful enforcement actions resulting in at least a $1M remedy are eligible to receive 10-30% of the money collected. Because the SEC is committed to protecting the identity and confidentiality of whistleblowers, details from these enforcement cases that could reveal their identities are kept confidential.

Also, financial firms and other companies are not allowed to retaliate against whistleblowers.

Recently, Wells Fargo (WFC) said that it has discovered evidence verifying some of the whistleblower retaliation claims alleged against the bank. A number of ex-employees claim that the bank took action against them for trying to end illegal sales tactics, including the setting up of up to two million bogus accounts.

Wells Fargo has retained a third party to examine incidents involving employees who were fired within a year of contacting the ethics line about these issues, as well as the retaliation claims brought by former employees. These individuals either spoke to the bank or the media directly after the fake account allegations came to light last year. Wells Fargo agreed to pay a $185M fine and a $5M customer refund to settle those charges.

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The SEC Order Regarding the Whistleblower Award (PDF)

Wells Fargo complaints show flaws in federal whistleblower program, Reuters, October 13, 2016