SEC awards 2 foreign whistleblowers with millions

The U.S. Securities and Exchange Commission, which protects investors by regulating the securities markets, maintains a whistleblower program. While the SEC regularly awards millions of dollars to individuals inside the U.S. who provide information about securities misconduct, the program is also open to whistleblowers from abroad.

Recently, the SEC announced it had given a $5 million award to a pair of whistleblowers who provided original information that was relevant to an SEC investigation. According to officials at the SEC, the information provided would have been difficult for the SEC to uncover without the assistance of the whistleblowers.

Foreign nationals may qualify for whistleblower awards

As the SEC’s recent announcement makes clear, foreign nationals and others outside the borders of the U.S. may qualify for whistleblower awards under the SEC’s program. To be eligible for an award, a person must furnish original information about a violation of securities law. The SEC must then bring an enforcement action which results in monetary sanctions of at least $1 million.

Foreign whistleblowers may be subject to retaliation

Coming forward with useful information about a violation of securities law can be difficult. After all, whistleblowers may fear retaliation. For whistleblowers in the U.S., whistleblower retaliation is usually illegal. For example, under Dodd-Frank, an employer may not take adverse action against an employee who engages in lawfully protected activities, including whistleblowing.

Those outside the U.S. may not have these legal protections, so a foreign whistleblower may have little legal recourse for retaliation. Still, the desire to provide useful information and the attractiveness of a monetary award may put the minds of foreign whistleblowers at ease.