Securities and Exchange Commission (“SEC”) whistleblower director Sean McKessy shares the desire of SEC whistleblowers and their counsel to increase the size and frequency of whistleblower awards, according to a recent Law360 interview. He stressed, however, that he was constrained by the confines of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (“Dodd-Frank”), the statute that authorizes the SEC to grant such awards.
Mr. McKessy noted that the limits on the SEC whistleblower office’s ability to grant whistleblower awards sometimes results in a nearly adversarial relationship between the whistleblower and the SEC. Mr. McKessy told Law360 that although it was difficult to inform a whistleblower that his or her information did not qualify for an award, he always tried to convey to whistleblowers that “ ‘What you have done is a very valuable service. Whether or not we can pay you, that doesn’t take away the fact that you were willing to come to us ... and we brought a great action. I promise you, nobody in this building wants to pay you more than I do, but I can’t pay you unless you meet the eligibility criteria, and here’s where we ended up on that.’ ”
Mr. McKessy also made clear that his interest in rewarding whistleblowers stems not only from his appreciation of their service, but because doing so “underscore[d] the credibility” of the SEC whistleblower program. He noted that the recent payment of $30 million to an anonymous SEC whistleblower would also help in that effort, and would serve to prolong the steady increase of tips the SEC has seen each year since the inception of the whistleblower program.