SEC to award executive whistleblower up to $575,000

The Securities and Exchange Commission said it plans to award a former company officer between $475,000 and $575,000 as a whistleblower for information he learned from another employee.

The agency said the unidentified whistleblower reported original, high-quality information about a securities fraud that resulted in an SEC enforcement action with sanctions exceeding $1 million. The name of the company was not released.

The SEC said in its statement Monday that officers, directors, trustees or partners who learn about a fraud through another employee reporting the misconduct are generally not eligible for an award under its whistleblower program.

However, there is an exception if an officer reports the information to the SEC more than 120 days after other responsible compliance personnel possessed the information and failed to adequately address the issue, which was the case here, the agency said.

“Corporate officers have front-row seats overseeing the activities of their companies, and this particular officer should be commended for stepping up to report a securities law violation when it became apparent that the company's internal compliance system was not functioning well enough to address it,” said Andrew Ceresney, Director of the SEC's Division of Enforcement, in the statement.

The SEC said it has now awarded 15 whistleblowers payouts of nearly $50 million since its whistleblower program began more than three years ago.