On April 5, 2018, the Securities and Exchange Commission ("SEC") announced that it has awarded $2.2 million to a whistleblower whose initial tip to another federal agency led to an SEC enforcement action. This marks the first instance in which the SEC has awarded a whistleblower for information from a tip that was previously reported to a different federal agency.
An investor, Tribhuwan Bisht, slapped Boeing with a putative class action lawsuit after being tipped off that Boeing had utilized dishonest accounting practices. Bischt caught wind of the practices through a media report documenting the alleged misbehavior. The tip came from Bloomberg Media's coverage of a possible SEC investigation into the 787 Dreamliner and 747 Jumbo's account.
The Dodd-Frank Wall Street Reform and Consumer Protection Act ("Dodd-Frank") is one of many laws that protect consumers from fraudulent acts committed by corporations. In order to increase transparency and expose organizations that engage in illicit activity, Dodd-Frank includes a "whistleblower program" that incentivizes individuals to come forward with information regarding possible securities law violations. If the information is original and leads to a Securities and Exchange Committee ("SEC") enforcement action in which more than $1,000,000 in sanctions is ordered, the SEC is authorized to provide monetary awards between 10 to 30 percent of what it collects to the individual.
A former managing director for private equity firm TPG Capital has filed a whistleblower lawsuit against his ex-employer. According to the suit, rather than using investor fees for their intended purpose -- to pay for the services of consultants and advisers -- TPG regularly used the fees to pay its own employees. This practice allows for double-billing by private equity employees, who bill once as a firm employee and again as a consultant to the companies in which the firm has invested.