Last week the SEC announced it had made an award of $700k under the Dodd-Frank Whistleblower reward programme to a whistleblower outside the company subsequently investigated and fined.  This is the first time since the scheme started in 2011 that an outsider has been given an award.

In announcing the award Andrew Ceresney, Director of the SEC’s Enforcement Division, stated: “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.  We will continue to leverage all forms of information and analysis we receive from whistleblowers to help better detect and prosecute federal securities law violations.”

In recognising and rewarding external “industry expert” analysis as well as insider disclosures, the SEC clearly has an open door for special interest groups, pressure groups and peers and competitors to provide either specific factual evidence or “high-quality analysis” sufficient to lead to an independent investigation.

Reinforcement – if any emphasis is needed – of the importance of getting corporate ethics and compliance right, throughout the organisation and every day.

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