Whistleblowers looking to cash in on the U.S. Securities and Exchange Commission’s (SEC) reward program that has paid hundreds of millions of dollars to tipsters, should avoid first alerting the media, at least on the record — as a prospective whistleblower was denied a reward after the commission ruled that their tip, which prompted an investigation, came via the media.
According to an order from the SEC, in late 2024, its staff denied a whistleblower award claim from a prospective tipster — an employee at a company that “was making false and misleading statements to their investors” about its compliance with certain policies.
The whistleblower contacted an unnamed media outlet with information about the alleged violations, which resulted in the publication of an article that identified the whistleblower and detailed their allegations.
After reading that report, SEC staff opened an investigation into the allegations — and, two days later, the regulator contacted the tipster about their allegations, and to seek other information.
The day after that, the tipster submitted a claim to the SEC’s whistleblower reward program, reiterating the allegations, and citing the media report that prompted the regulator’s investigation.
Yet, the claim for a reward was denied on the basis that the tipster didn’t “voluntarily” provide the information to the SEC — instead, it was provided after the agency’s investigators contacted them, even though it was their tip to the media that...
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