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Recent SEC Award Demonstrates Whistleblowers Don't Have to be Insiders

Posted by Dan Cogdell | May 02, 2016 | 0 Comments

In January, the SEC provided a $700,000 whistleblower award to an individual who was not an employee or contractor of the company sanctioned by the SEC but who “conducted a detailed analysis that led to a successful SEC enforcement action.”

Andrew Ceresney, SEC Enforcement Division Director, said, “The voluntary submission of high-quality analysis by industry experts can be every bit as valuable as first-hand knowledge of wrongdoing by company insiders.”

The SEC protects the identity of whistleblowers and information on the individual outsider and the company involved was not provided in the announcement. However, the SEC did state that the whistleblower originally provided a detailed analysis to the SEC prior to the enactment of Dodd-Frank, making the individual ineligible for an award.

Following the passage of Dodd-Frank, the whistleblower provided the SEC with a subsequent detailed analysis providing additional new information that contributed to a successful enforcement action against the company.

In its award announcement, the SEC said that it welcomes analytical information from those with in-depth market knowledge and experience that may provide the springboard for an investigation.”

The SEC whistleblower program, created by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, provides financial incentives for individuals to report securities law violations to the SEC. If the agency acts upon that information and obtains sanctions or settlements in excess of $1 million, the whistleblower can receive up to 30% of the full recovery. To date, the SEC has awarded over $55 million to 23 whistleblowers.

The Cogdell Law Firm is a full service criminal litigation and appellate law firm. We provide client-focused representation at all stages of the process, whether our clients are seeking to avoid charges, have been charged, or are seeking reversal of a conviction on appeal. When results matter most, contact Dan Cogdell at (713) 426-2244 or [email protected]

About the Author

Dan Cogdell

Principal & Founder Principal and founding attorney at Cogdell Law Firm, Dan Cogdell, is often referred to by his contemporaries as a “Texas trial legend.” He has been practicing criminal defense law for 36 years, during which time he has handled some of the most complex and high-profile cases i...


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