Late yesterday, the SEC Office of the Whistleblower issued its annual report to Congress chronicling the program’s activities during the prior fiscal year.
We summarized the results in a piece for the FCPA Blog here. Looking at the eight whistleblower awards issued this past year, there are two notable firsts: the first whistleblower award
to a company officer and the first time the Commission flexed its muscle by issuing an award to a whistleblower who suffered retaliation. We are so
gratified to note that both of these landmark actions involve Labaton Sucharow clients. For more information on the whistleblower program results,
see the full report here.
The SEC just announced another whistleblower award, granting more than
$325,000 to a former investment firm employee whose tips led to a successful enforcement action. This award, like the $30 million award granted to
a whistleblower last year, came with a caveat: the whistleblower could have received a larger award, if not for a delay in reporting. While
the whistleblower waited to report the misconduct until after leaving the firm, whistleblowers are provided significant employment protections to encourage
the timely reporting of misconduct. Speaking to this, Enforcement Division chief Andrew Ceresney noted that the program encourages tipsters to come
forward in order to "prevent misconduct from continuing unabated while investors suffer more harm.”
While deciding to blow the whistle is a complex decision, timing matters. Sometimes, a cursory submission, followed by a more lengthy and detailed
submission, may be in a whistleblower’s best interest. And, whistleblowers who fear retaliation may wish to consult an attorney to explore the anonymity
protections afforded by Dodd-Frank’s program when individuals work with a whistleblower advocate.