On October 1, 2013, the Securities and Exchange Commission (SEC) announced that it has awarded over $14 million to an unnamed whistleblower. This is the third and the largest award from the SEC Office of the Whistleblower since its establishment under the Dodd-Frank Act in 2011.
Under the SEC program, a whistleblower providing “original information” that aids an SEC enforcement action and leads to $1 million or more in penalties can receive 10 to 30 percent of the sanctions the SEC collects.
Doubtless, the size of this award will draw more attention to the program, which business groups already oppose. Businesses oppose the program because it does not require whistleblowers to report suspected violations using internal processes first. Businesses fear that the potential for monetary reward causes whistleblowers to go directly to the SEC instead of using internal processes first.