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US SEC issues $300,000 whistleblower award

The US Securities and Exchange Commission (SEC) has issued a $300,000 reward to an employee who blew the whistle on company misconduct unearthed during the course of audit and compliance work, after the company's management failed to address the issue.

The employee, whose identity the SEC is legally bound to protect, reported concerns of wrongdoing to company management, including a supervisor. However, when 120 days passed without the issue being addressed, they reported the same information to the SEC, leading to enforcement action by the commission.

The SEC said the award programme is the first for whistleblowers with an audit or compliance function within a business. Employees whose companies failed to take action following internally reported findings of in their audit and compliance work will be eligible.

According to the SEC, the programme rewards "high-quality, original information that results in an SEC enforcement action with sanctions exceeding $1 million" and the payout can range from 10% to 30% of the money collected through the case.

SEC office of the whistleblower chief Sean McKissey explains: "individuals may be eligible for an SEC whistleblower award if their companies fail to take appropriate, timely action on information they first reported internally."

"Individuals who perform internal audit, compliance, and legal functions for companies are on the front lines in the battle against fraud and corruption. They often are privy to the very kinds of specific, timely, and credible information that can prevent an imminent fraud or stop an ongoing one."

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