SEC Announces Its Largest-Ever Whistleblower Awards
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Re: SEC Announces Its Largest-Ever Whistleblower Awards
#2Interesting to see the SEC finally grow some teeth, between the recent ICO enforcement actions, Theranos penalty, and now this. When I was in financial software (06-07) they were basically a joke; my employer had developed some software to help enforce a (relatively obscure) regulation and tried to sell it to them, and they were completely indifferent. Kind of a welcome change, if they manage to get people to be more interested in actual productive activity than fleecing dumber investors, but it'll take a while to change a culture.
Re: SEC Announces Its Largest-Ever Whistleblower Awards
#3Does anyone know what kind of violations they reported (and which companies)?
Re: SEC Announces Its Largest-Ever Whistleblower Awards
#4This program is a great example how setting the right incentives can destabilize a criminal conspiracy. It’s also worth noting that “traditional” law enforcement in white collar crimes is essentially the same: the possibility of criminal proceedings almost always outweighs the sort of incentives a corporation can offer lower-level employees. Would you risk jail time as a bookkeeper earning a 5-figure salary at #bigCorp Inc?
It’s arguably the same dynamic now befalling the presidential administration, only that the salaries are even lower than in the private sector, and you’re almost certainly looking at 6-digit bills from your lawyer just because working in the building will make you a potential witness.
Re: SEC Announces Its Largest-Ever Whistleblower Awards
#5Does anyone know what kind of violations they reported (and which companies)?
> By law, the SEC protects the confidentiality of whistleblowers and does not disclose information that might directly or indirectly reveal a whistleblower’s identity.
Re: SEC Announces Its Largest-Ever Whistleblower Awards
#6Does the SEC have a line item in its budget for whistleblower awards? If so what do they do if there are a lot of cases to pay out? Can they run out of money for these things? I'd love to know what that process looks like.
Re: SEC Announces Its Largest-Ever Whistleblower Awards
#7Whistleblowing can be it's own business model, just do a google search for Ven-a-care.
Ven-a-care is a small pharmacy down in the Florida Keys. A few decades ago, it started to notice that the price it was paying for certain drug was very different from what the gov't thought they cost. Gov't price reporting is incredibly strict in pharma due to past mucking with the numbers.
So they started a lawsuit which was picked up by the DOJ.
Then they did it again, and again, and again.
Last I saw, they've racked up almost $600M in whistleblower awards.[1]
Re: SEC Announces Its Largest-Ever Whistleblower Awards
#8Does the SEC have a line item in its budget for whistleblower awards? If so what do they do if there are a lot of cases to pay out? Can they run out of money for these things? I'd love to know what that process looks like.
I imagine that the whistleblowers get paid from the proceeds of fines levied due to the whistleblowing.
Re: SEC Announces Its Largest-Ever Whistleblower Awards
#9Does the SEC have a line item in its budget for whistleblower awards? If so what do they do if there are a lot of cases to pay out? Can they run out of money for these things? I'd love to know what that process looks like.
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Re: SEC Announces Its Largest-Ever Whistleblower Awards
#10Does the SEC have a line item in its budget for whistleblower awards? If so what do they do if there are a lot of cases to pay out? Can they run out of money for these things? I'd love to know what that process looks like.
The whistleblower awards are typically a fixed percentage of the fines that the SEC levies (10% - 30% depending on circumstances). So if you blow the whistle on your company and the SEC fines them $100M, the SEC will get ~$80M and the whistleblower will get ~$20M.
So in that sense, no, they can never run out of funds to pay them off.