We heard you!
Your business is moving fast. You need to assess new developments quickly, determine if they apply to your business, and act accordingly. The Ticker is designed to focus your attention on key developments in the areas of SEC compliance, capital markets, corporate governance, executive compensation and other matters important to public companies and their officers and directors. Below are summaries of recent developments in these areas.
On September 6, the SEC announced an award of $39 million to one whistleblower and $15 million to another, stating that the whistleblowers’ “critical information and continued assistance helped the agency bring an important enforcement action.” According to the press release, “The $39 million award is the second largest award in the history of the SEC’s whistleblower program.”
On September 14, the SEC announced an award of $1.5 million to a whistleblower who “provided the SEC with vital information and ongoing assistance that proved important to the overall success of an enforcement action.” The SEC’s order notes that the award was “severely reduced” because the whistleblower unreasonably delayed in reporting the information and benefited financially during the delay. According to the order, “whistleblowers with similar conduct should expect to receive a severely reduced award—indeed, even one as low as the minimum statutory threshold—in future cases.”
For context, the SEC’s Office of the Whistleblower has awarded approximately $322 million to 58 whistleblowers since 2012. Under current rules, whistleblower awards can range from 10 to 30 percent of the money collected by the SEC in enforcement actions where the monetary sanctions exceed $1 million, with no cap on awards. A recent article in The Wall Street Journal discusses the outcry against an SEC proposal to cap whistleblower awards in the biggest cases, those in which the SEC collects penalties of $100 million or more, to a level “that is reasonably necessary to reward the whistleblower and to incentivize other similarly situated whistleblowers.”