Officers, directors, trustees, or partners who hear about a fraud through another employee are not eligible for a whistleblower award until 120 days after the employee has failed to notify the SEC.  This case is the first time an officer earned a whistleblower award under these conditions.

Andrew Ceresney, the SEC’s Division of Enforcement Director, stated, “Corporate officers have front-row seats overseeing the activities of their companies, and this particular officer should be commended for stepping up to report a securities law violation when it became apparent that the company’s internal compliance system was not functioning well enough to address it.”

Since March 2015, the SEC has awarded almost $50 million to whistleblowers out of an investor protection fund established by Congress.  Whistleblower awards can range from 10 percent to 30 percent of the money collected in a successful case.  The money paid to whistleblowers is from an investor protection fund established by Congress and funded by fees paid by securities law violators to the SEC.  Harmed investors’ funds do not contribute to whistleblower awards.

“Receiving information and cooperation from company insiders is particularly useful in the early detection of securities fraud, and we will continue to leverage whistleblower information to help combat securities law violations and better protect investors and the marketplace,” said Sean McKessy, Chief of the SEC’s Office of the Whistleblower.

If you or someone you know has lost money as a result of an investment or Ponzi scheme, please contact Richard Frankowski at 888-741-7503 to discuss your potential legal remedies or complete the contact form.