The Dodd-Frank Act authorizes the SEC to pay rewards to whistleblowers who provide information about violations of the federal securities laws. The reward or bounty amounts to between 10 and 30 percent of any money collected in an SEC enforcement action where more than $1 million in sanctions is awarded.
In this case, the whistleblower provided documents and other information that resulting in a court order requiring the wrongdoer to pay more than $1 million in sanctions. So far, approximately $150,000 has been collected, and the whistleblower has been awarded 30% of that amount. If more money is collected, the whistleblower’s reward could increase.
The whistleblower’s identity is being kept confidential. The law provides that the SEC may not disclose any information which could reasonably be expected to directly or indirectly reveal a whistleblower’s identity.
The SEC receives approximately eight tips every day. While it is too early to tell how many of these tips will result in rewards being paid to whistleblowers, SEC Chairman Mary L. Schapiro is pleased so far with the quality of information being provided. “We’re seeing high-quality tips that are saving our investigators substantial time and resources,” she said in a statement.
If you are aware of securities fraud or other violations of securities laws, you should consult with an experienced lawyer immediately to protect your rights. To schedule a free and confidential consultation by telephone or in person, call my office today at (212) 601-2728 or click here to communicate with me via email.
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