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By Amanda Balbi
April 1, 2015

The Whistleblower Program of the U.S. Securities & Exchange Commission (SEC) has awarded a former company officer between $475,000 and $575,000 for reporting company fraud that led to sanctions of more than $1 million. Although the SEC has awarded 15 whistleblowers since the program’s inception in 2012, this is the first whistleblower to be awarded under an exception to a rule.


The rule states that officers, directors, trustees, and partners are ineligible for the award if they learn about the alleged fraud event when another employee reports it to the company. But according to the SEC, “There is an exception to this exclusion that makes an officer eligible if he or she 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.”


The officer reported a securities law violation when he or she realized the company’s internal controls had failed to address it.


Read the SEC’s full press release at http://1.usa.gov/1xmflPv.







Amanda Balbi is copy editor of Strategic Finance magazine. You can reach her at abalbi@imanet.org.
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