Two men share securities regulation news

Breaking news and expert analysis on legal and compliance issues

[Back To Home][Back To Archives]

From Securities Regulation Daily, July 31, 2014

SEC whistleblower banks $400K+ award

By Amy Leisinger, J.D.

The SEC today announced an award of more than $400,000 for a whistleblower who reported a fraud to the SEC after the company failed to address the issue. According to the Commission, the whistleblower provided the Commission with specific and credible information and gave the agency the opportunity to complete its investigation quickly following the company’s failure to internally address the whistleblower’s numerous attempts to rectify the matter (Release No. 34-72727, July 31, 2014).

In a press release, Sean McKessy, chief of the SEC’s Office of the Whistleblower, said: “The whistleblower did everything feasible to correct the issue internally. When it became apparent that the company would not address the issue, the whistleblower came to the SEC in a final effort to correct the fraud and prevent investors from being harmed.”

Whistleblower award. Last year, the SEC’s Claims Review Staff preliminarily determined that the whistleblower’s award claim should be denied because the information did not appear to have been “voluntarily” provided as required by the whistleblower rules. According to the determination, the information was imparted as a result of a prior inquiry by a self-regulatory organization. However, following a detailed response by the claimant describing the order of events and the individual’s long-term, diligent efforts to correct the underlying misconduct, the SEC decided to waive the “voluntary” requirement of Rule 21F-4(a) based on extenuating circumstances. The award recognizes the claimant’s efforts both to protect investors and to report the violation internally, the Commission explained.

MainStory: TopStory DoddFrankAct Enforcement

Securities Regulation Daily

Introducing Wolters Kluwer Securities Regulation Daily — a daily reporting service created by attorneys, for attorneys — providing same-day coverage of breaking news, court decisions, legislation, and regulatory activity.


A complete daily report of the news that affects your world

  • View full summaries of federal and state court decisions.
  • Access full text of legislative and regulatory developments.
  • Customize your daily email by topic and/or jurisdiction.
  • Search archives for stories of interest.

Not just news — the right news

  • Get expert analysis written by subject matter specialists—created by attorneys for attorneys.
  • Track law firms and organizations in the headlines with our new “Who’s in the News” feature.
  • Promote your firm with our new reprint policy.

24/7 access for a 24/7 world

  • Forward information with special copyright permissions, encouraging collaboration between counsel and colleagues.
  • Save time with mobile apps for your BlackBerry, iPhone, iPad, Android, or Kindle.
  • Access all links from any mobile device without being prompted for user name and password.