The Securities and Exchange Commission has issued its first whistleblower award of $300,000 to a compliance auditor for a company. The whistleblower reported financial wrongdoing to the SEC after the company failed to take action after the employee reported it internally.
The Securities and Exchange Commission announced Friday that is has awarded its first whistleblower award to an employee who performed audit and compliance functions.
The employee, who was awarded more than $300,000, reported wrongdoing to the SEC after the company failed to take action when the employee reported it internally.
The SEC’s whistleblower program rewards high-quality, original information that results in an SEC enforcement action with sanctions exceeding $1 million. Whistleblower awards can range from 10% to 30% of the money collected in a case.
By law, the SEC must protect the confidentiality of whistleblowers, but a recent recipient of a whistleblower award decided to tell his story about the complaint he made to the SEC after exposing serious flaws in two of MassMutual’s variable annuities, the Guaranteed Income Benefit Plus 5 and 6. The whistleblower, insurance agent Bill Lloyd, was awarded $400,000. After his attempts to get the issue resolved internally failed and when the Financial Industry Regulatory Authority didn’t step in, Lloyd, too, turned to the SEC for help.
One unique aspect of the SEC whistleblower program is that you don’t have to render your name or identity and can file it all confidentially through legal counsel.
Jeffrey Newman represents whistleblowers.