The U.S. Securities and Exchange Commission has awarded another whistleblower for coming forward with information that has resulted in a successful enforcement action. This time the award amount is $3.5M. This latest award ups the total awarded by the regulator’s whistleblower program to about $135M to 36 individuals since 2012. The award comes a few weeks after the SEC announced it had issued $20M to another whistleblower in a different enforcement case.
The regulator awards individuals, who voluntarily come forward with original and useful information, 10 to 30% of monetary sanctions collected from a successful enforcement action, as long as that sum collected is greater than $1M. To date, whistleblower tips have allowed the SEC to bring enforcement actions resulting in over $874M in financial remedies. Because the whistleblower’s anonymity is protected, details about each case that could expose the tipster’s identify are kept confidential.
Whistleblower Retaliation
Individuals who turn whistleblowers are supposed to be protected from retaliation under the Dodd Frank Act. However that isn’t always the case. Now, an ex-Vanguard Group employee has filed a lawsuit accusing the firm of firing her because she engaged in whistleblower activity.
Karen Brock claims that the mutual fund giant violated the Dodd-Frank act when it terminated her. She believes that Vanguard let her go because she disclosed to the SEC information about the firm’s lax procedures and practices involving customer information security and client confidentiality. Brock said she’d complained to the company about her concerns first but that they had disregarded her worries.
Vanguard terminated Brock from its employment last August within days of her whistleblowing becoming public. The mutual fund company accused Brock of unprofessional behavior.
Now, Brock is contending that the reasons that the firm gave for her discharge are “fictions” and were merely an attempt by Vanguard to circumvent whistleblower protection laws.
Brock believes that Vanguard has continued to get back at her by sabotaging her attempts to seek new employment. She claims that Vanguard allegedly published “false accusations” about her purported unprofessional behavior on FINRA’s site and on another site that is only for securities industry members. Brock claims that these actions by Vanguard are the reason she has yet to receive a single job offer. Vanguard has since taken down the public post that was on FINRA.
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Read the SEC Whistleblower Award Order (PDF)
Vanguard Whistleblower Sues Mutual Fund Giant for Wrongful Termination, Distress, The Street, December 5, 2016
SEC Spotlight on Whistleblower Awards