In 2011, on TheStreetSweeper.com, Shell questioned how Miller Energy Resources Inc., an oil and natural gas driller in Tennessee, valued its properties. “This Hot ‘Alaska’ Stock May Be About to Melt,” the headline read. Four years later the company paid more than $5 million to settle SEC allegations that it overstated the value of its Alaska oil and gas reserves. Miller Energy, which neither admitted nor denied the claims, ultimately filed for bankruptcy.
The SEC runs a whistleblower program that would seem perfect for Shell. If investigators bring a successful case based on information sent their way, the informant can keep 10% to 30% of any money recovered as a reward. Over the years, Shell figures she’s sent in a dozen tips. But she stopped about seven years ago, because she never heard back. “It’s such a nuisance when you know they aren’t going to get to it this year—and maybe not ever,” she says.
Her gripe is typical of those who alert the SEC. They include corporate insiders, amateur stock sleuths and professional investors, including short sellers who profit from the declines in share prices. (Shell says she didn’t short Miller Energy but has bet against other shares, though not recently.) Her lament reflects a reality of the 11-year-old whistleblower program: Out of 60,000 tips sent its way, fewer than 300 have resulted in awards.
The SEC, which won’t say how many of these leads have merit, insists it reviews each one. But even when the information pans out,...
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