The U.S. Securities and Exchange Commission recently announced the latest whistleblower bounty awarded under the Dodd-Frank Act, which authorizes rewards for original information about violations of securities laws. Whistleblowers can receive 10 percent to 30 percent of the money collected in an SEC enforcement action where the monetary sanctions imposed exceed $1 million.
On July 31, 2014, the SEC announced that an anonymous whistleblower received more than $400,000 for reporting a fraud to the SEC after first repeatedly trying to have the matter addressed internally by the company involved. The SEC, in order to preserve the whistleblower’s anonymity, provided no details about the nature of the fraud or the enforcement action.
“The whistleblower did everything feasible to correct the issue internally,” Sean McKessy, chief of the SEC’s Office of the Whistleblower, said in a statement. “When it became apparent that the company would not address the issue, the whistleblower came to the SEC in a final effort to correct the fraud and prevent investors from being harmed.”
Nine whistleblowers have received bounties since the SEC’s whistleblower reward program began in late 2011. In June, the SEC announced that a bounty of more than $875,000 would be split evenly between two whistleblowers whose tips and assistance helped the SEC bring an enforcement action. The SEC’s largest reward to date came in October 2013, when a whistleblower received a bounty of more than $14 million for providing information to the SEC.