In late August, the SEC continued doing its part to make 2016 a banner year for whistleblower rewards by making the second-largest whistleblower reward ever under its program, and pushing the total rewards paid under the six-year old program over $100 million. The SEC provided a $22 million reward to an unidentified former executive at Monsanto, a multinational agrochemical and biotechnology corporation, in response to information brought by the Monsanto executive regarding the company’s illegal accounting practices. The enormous award is another sign that the federal government appears to be continuing to ramp up efforts to reward whistleblowers with information that can lead to civil and criminal prosecution of wrongdoers.
What We Know About the Monsanto Whistleblower
The SEC has not identified who the Monsanto executive whistleblower is, and, while this leaves unanswered questions for observers, it is the SEC’s practice not to identify whistleblowers in order to protect them from publicity and retaliation and to encourage them to come forward. The SEC had earlier brought an enforcement action against Monsanto and announced the results of that action in February 2016.
At that time, the SEC announced that Monsanto had agreed to pay $80 million in penalties over accounting and disclosure violations that had occurred in connection with its well-known weedkiller product Roundup. As part of an effort to compete with generic weedkillers, Monsanto had offered significant rebates to customers to incentivize them to purchase Roundup, but had failed to properly account for the rebates in reporting sales figures to its investors. By reporting the sales figures which were falsely inflated due to the fact that the rebates were not fully accounted for, the company misled investors as to the financial health of the company, which is a clear violation of SEC rules.
Although the SEC did not provide any details about the executive or what information was reported by the whistleblower or in what manner, the executive likely had been made aware of the fraudulent accounting at the company and had provided the SEC with the information leading to the $80 million penalty. As a result, the SEC awarded the executive with a reward of $22,437,800.
SEC Whistleblower Rewards Top $100 Million
With this latest reward, the second-largest ever ($30 million was provided to a whistleblower in 2014), the SEC has now paid $107 million in rewards since the start of the SEC whistleblower program in 2010. This amount has been paid to 33 different whistleblowers, meaning the average whistleblower has received around $3.3 million. The payments are made from funds collected from wrongdoers who have paid sanctions, of which the SEC has collected over $500 million since 2010.
No End in Sight for SEC Rewards
While the $107 million figure is impressive, what’s even more impressive is that approximately $48 million of that has been paid just this past summer, suggesting many more rewards are to come. Bringing whistleblower information to the SEC can be a long, complex process, but it can also be tremendously lucrative, and the right thing to do to help keep our financial markets fair.To learn more about how Kriendler & Associates can help in your SEC whistleblower matter, see here.
