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The extent to which the SEC would reward whistleblowers, who themselves engaged in wrongdoing, has been the subject of considerable debate since the SEC promulgated its Dodd-Frank Act whistleblower rules in 2011. A recent order makes this significant as it appears to confirm that the SEC will pay whistleblower awards to wrongdoers — even those against whom the SEC has a judgment arising from the whistleblower’s conduct in the very case that has led to the award.
On April 7, 2016, the SEC ordered that a whistleblower would receive more than $275,000 for having provided information that led to monetary sanctions collected in an undisclosed enforcement matter filed in federal district court. The redacted order, however, suggests that the whistleblower in the case may have been a party that the SEC found to be liable for wrongdoing in connection with the same or a related matter. Specifically, the award states that the whistleblower’s award shall be subject to an offset for any obligation that remains unpaid from the “final judgment” entered against the whistleblower in an undisclosed matter.
The full original article can be found at natlawreview.com