Compliance Officer Receives $1.4-$1.6 Million Whistleblower Award 

The SEC awarded $1.4-$1.6 Million to a compliance officer that acted as a whistleblower against the whistleblower’s company.  According to the SEC, the compliance officer reported misconduct “after responsible management…became away of potentially impending harm to investors and failed to take steps to prevent it.”  According to the SEC, this is the second award to an internal audit or compliance professional.

OUR TAKE: Allowing compliance officers to receive whistleblower awards changes their role in the regulatory system.  Knowing that compliance officers have this regulatory club, management may begin to treat compliance officers as adverse parties.  This is yet another reason why firms should consider the third party compliance model, where an outside and independent firm audits a firm’s regulatory compliance.