According to this recent Wall Street Journal article:
“The record $279 million whistleblower award issued by the Securities and Exchange Commission earlier this month stemmed from a bribery case against telecommunications company Ericsson.” (See here for the prior post about the 2019 enforcement action).
Even though the SEC’s whistleblower award is highly redacted, the few portions that are readable are interesting.
For instance, the SEC states:
“While Claimant 1’s information was important, it was submitted after the Investigation had already been opened and after Staff had already become aware of potential [Redacted] misconduct by the Company Further, Claimant 1’s specific information only related to certain of the conduct that the Commission ultimately charged in the Covered Action.”
Even so, the order states:
“The record reflects that: (1) Claimant 1’s information was significant, as it caused Enforcement staff responsible for the Covered Action (“Staff”) to expand the Investigation from [Redacted] (2) Claimant 1’s information saved the Commission significant time and resources; and (3) Claimant 1 provided substantial, ongoing assistance, which included multiple written submissions, communications, and interviews.”
This FCPA Blog post asserts that the whistleblower award “resets the FCPA” and that “historically, the SEC receives relatively few FCPA-related whistleblower tips.”
No doubt at $279 million dollars, the award is an eye-popping number, but it does not “reset” anything FCPA related.
Moreover, as highlighted in this annual post, since FY2011 the SEC has received approximately 2,150 FCPA tips – hardly a number deserving of a “relatively few” assertion.
The FCPA Blog predicts that because of this award, “the SEC will be logging more FCPA tips than ever.”
I doubt it.
Each year over the last approximate decade, the SEC receives approximately 200 FCPA tips.
But then again, like many things SEC whistleblower program related, time will tell as the SEC is required to submit annual reports to Congress regarding its whistleblower program.
Finally, the FCPA Blog asserts:
“We know Ericsson first disclosed the government’s FCPA investigation in June 2016, according to data from FCPA Tracker. That probably means the SEC logged the Ericsson tip sometime in 2015 or 2016, but we can’t be sure.”
However, as Ericsson previously disclosed, the SEC initiated their investigation of the company in 2013 and the DOJ initiated their investigation in 2015. Moreover, the SEC’s order explicitly states that the whistleblower information “was submitted after the Investigation had already been opened.”
