Whistleblower Reported to SEC after Firm Ignored Concerns
The SEC awarded more than $400,000 to a whistleblower who it claims only reported the fraud to the SEC after the whistleblower attempted to resolve the issue internally. The SEC indicated that the “whistleblower had tried on several occasions and through several mechanisms to have the matter addressed internally at the company” and only went to the SEC when “it became apparent that the company would not address the issue.” The SEC did not disclose the nature of the fraud or the internal efforts.
OUR TAKE: This shows the regulatory purpose of the whistleblower law i.e. to encourage companies to take internal complaints seriously. If not, an employee with a legitimate concern has a financial incentive to report directly to the SEC.