The SEC rewarded an industry expert with more than $700,000 after evaluating four whistleblower requests for a reward. In the press release concerning the award, the SEC encouraged other outsiders who do not work for the company but suspect violations of the federal securities laws to report them.
Andrew Ceresney, Director of the SEC’s Enforcement Division praised “high-quality analysis by industry experts as every bit as valuable as first-hand knowledge of wrongdoing by company insiders.”
Sean McKessy, the head of the SEC Whistleblower Office, added in the press release that they “welcome analytical information from those with in-depth market knowledge and experience” that jumpstarts an investigation by the government.
The press release indicated the “company outsider” provided a “detailed analysis” that led to the enforcement action. The whistleblower office rewards “original information”. This is defined as information derived from independent knowledge (facts not derived from publicly available sources) or independent analysis (analysis of publicly available information that reveals information not generally known).
This is the first time that SEC officials have highlighted the independent analysis of a whistleblower although we know based on the information that they have provided that other individuals who are not employees have received rewards.
Three other individuals submitted the SEC application for an award, Form WB-APP. They each received a preliminary determination that they were not entitled to an award. Claimant #4, as he or she is referred to in the award, requested reconsideration of the Preliminary Determination. Nevertheless, the tip was subsequently determined to not contribute to the success of the enforcement action.
To speak to our SEC whistleblower lawyers about this information or for an evaluation of a potential submission to the SEC, please call 1-800-590-4116.