Whistleblower Award to Compliance Officer

Some compliance professional out there just received a $450,000 whistleblower award from the Securities and Exchange Commission — apparently after that person took his or her concerns to management, was ignored, and then brought those concerns to the SEC instead. 

The SEC announced the award on Monday. As usual, we don’t know many details. A press release from the agency only described the whistleblower as someone “with compliance-related responsibilities” at his or her company, but we don’t know the whistleblower’s exact role or his or her seniority at the company. Nor do we know the company in question, what misconduct happened, or when it happened. 

We only know this: the whistleblower was a compliance officer at his or her business. The person discovered evidence of misconduct, and brought that evidence to supervisors. Then came some sort of retaliation, which the SEC award order described as “unique hardships as a result of claimant’s internal reporting.” 

Pssst, SEC: Radical Compliance been documenting retaliation against compliance officers for years. Rest assured, hardships as a result of internal reporting are not unique to this compliance officer. 

whistleblowerAnyway, under the SEC whistleblower program, corporate compliance and internal audit professionals aren’t eligible for awards unless they first try to report the matter internally to senior management. If management takes no action for 120 days, then the compliance officer can bring concerns to the SEC and be eligible for a whistleblower award. 

That’s what happened here. Now the compliance officer is $450,000 richer, so drinks are on that person at the next compliance conference, whenever that might be. We can toast this person’s dedication to the job and his or her perseverance over difficult circumstances; they deserve it.

One other interesting detail: the SEC was already investigating this company before the compliance officer showed up with his or her information. Typically that means the whistleblower is not eligible for an award; you’re supposed to bring original information on some matter the SEC didn’t already know about.

But that rule isn’t etched in stone, and the SEC has deviated from it before. In this instance, the SEC said, “although not the source of the investigation, claimant’s information was significant in that it refocused the investigation on the violations that were ultimately charged.”

This is the third time the SEC has given a whistleblower award to a compliance or internal audit professional since the program started in 2011. 

Also, this is the third SEC whistleblower award announced within the last week. The SEC also gave a $1.6 million award to a whistleblower on March 23; and a $570,000 award split between two people on March 24. Neither of those cases involved compliance officers as whistleblowers that we know of.

Leave a Comment

You must be logged in to post a comment.