On November 17, 2014, the SEC released its fourth annual report on the Dodd-Frank Whistleblower Program. For the fourth consecutive year, the Office of the Whistleblower reported an increase in whistleblower tips, with a record 3,620 tips received in the 2014 fiscal year. Texas surpassed New York as the state with the third-most tips, trailing only California and Florida, and tips remained the highest in the corporate disclosure and financials, offering fraud, and manipulation categories for the fourth straight year.
The Office of the Whistleblower also awarded more individual awards, nine, than in any previous year. The highlight was a $30 million award to a whistleblower living outside the U.S., which was awarded on September 22, 2014. That whistleblower provided information that allowed the SEC “to discover a substantial and ongoing fraud that otherwise would have been very difficult to detect,” justifying the hefty award. Other awards ranged from $140,000 to $875,000. With an increase in the number and amount of whistleblower awards, it would be no surprise to see whistleblower tips increase again in 2015.
The 2014 annual report also detailed the SEC’s first enforcement action under the anti-retaliation provision of the Dodd-Frank Act that prohibits employers from retaliating against individuals when they engage in protected whistleblowing activity. That enforcement action resulted in a $2.2 million settlement in favor of the SEC. With such a favorable settlement, it seems likely that the SEC will pursue similar enforcement actions under the Act’s anti-retaliation provision in the future.