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SEC awards $37 million to whistleblower

On Behalf of | Dec 22, 2022 | Healthcare Fraud, Whistleblower Protection

On December 19, the Securities and Exchange Commission announced a $37 million award to a whistleblower whose information led to successful enforcement and related actions. The SEC did not indicate what company the action was against, but the Wall Street Journal reports that it is “a large European healthcare company.”

The Journal also reported that the whistleblower provided information about a bribery scheme where the distributors increased the costs and profit margin when selling healthcare products to foreign hospitals and then used the extra money to bribe officials and get additional business. The whistleblower’s identity remains unpublished, but they are said to be a company outsider.

The whistleblower stepped forward to be the initial source in the company’s internal investigation and then again for the SEC and the Justice Department. While this firm was not involved in the case, the whistleblower’s representatives said the action was conducted under the Foreign Corrupt Practices Act. The sum is the most significant amount the SEC awarded this year and ranks as one of the agency’s top 10 highest amounts ever.

The whistleblower did not follow the protocol of first reporting their information about the scheme to the company, as the SEC often requires. Still, they did make a concerted effort to raise the alarm about the scheme to the company and regulators.

“The whistleblower here made persistent efforts to bring the conduct to the attention of the SEC, [the Department of Justice], and the company and is credited with the results of the company’s internal investigation,” said Creola Kelly, Chief of the SEC’s Office of the Whistleblower.

The SEC pays 10 to 30% of the total monetary penalties to whistleblowers who provide information that leads to a successful action, so this action involved $370 million to $1 billion in fines.