Call us: 1 (877) 692-1965

SEC Pays Maximum for First Whistleblower Award

The US Securities & Exchange Commission (“SEC”) announced that it has given its first award to a whistleblower as provided for by 2010 Dodd-Frank Act, which authorized the SEC to reward individuals, who offer high-quality information, 10% to 30% of the amount recovered from a successful enforcement action that yields at least $1 million or more in sanctions. 

In the press release issued August 21, the SEC said it rewarded an anonymous tipster who provided documents and other significant information to the SEC the maximum percentage award allowed by the law.  The tipster received $50,000, which represents 30 percent of the amount collected in the SEC enforcement action. 

Since the program was established in August 2011, the SEC has been receiving about eight tips a day.  “The whistleblower program is already becoming a success,” said SEC Chairman Mary L. Schapiro.  “We’re seeing high-quality tips that are saving our investigators substantial time and resources.” 

Robert Khuzami, Director of the SEC’s Division of Enforcement, indicated that the “whistleblower provided the exact kind of information and cooperation we were hoping the whistleblower program would attract.   Had this whistleblower not helped to uncover the full dimensions of the scheme, it is very likely that many more investors would have been victimized.” 

The whistleblower’s assistance led to a court ordering more than $1 million in sanctions of which approximately $150,000 has been collected thus far.  The court is considering whether to issue a final judgment against other defendants in the matter.  Any increase in the sanctions ordered and collected will increase payments to the whistleblower. 

Since the Dodd-Frank Act precludes the SEC from disclosing any information that could expose the identity of an anonymous whistleblower, the agency refused to give specific details about the enforcement action in which Tuesday’s whistleblower award was issued. 

Sean McKessy, Chief of the SEC’s Whistleblower Office, projects continued success for the program, “[t]he fact that we made the first payment after just one year of operation shows that we are open for business and ready to pay people who bring us good, timely information.” 

For a copy of the SEC’s August 21 press release announcing the first whistleblower award, click here

If you would like more information on whistleblower awards, or other news, please click here and fill out the confidential form.


Sponsored by:

Visit Milberg LLP
© 2014 Milberg LLP
ATTORNEY ADVERTISING. PRIOR RESULTS DO NOT GUARANTEE A SIMILAR OUTCOME
All Rights Reserved
Site & Hosting by Cohesive Websites