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First SEC whistleblower scores second payout

The Securities and Exchange Commission said the whistleblower who received the first award under its Dodd-Frank program more than two years ago will collect $150,000 more, thanks to the agency recovering more funds in the case.

The whistleblower, who the SEC has never identified to protect confidentiality, has now been paid about $200,000.

The first Dodd-Frank award was announced in August 2012

The whistleblower helped the SEC stop a multi-million dollar fraud. He or she provided documents and other information that allowed the agency’s investigation to move quickly and prevent more victims from being harmed.

The whistleblower’s original award was 30 percent of the amount collected in an SEC enforcement action against the fraudsters. That’s the maximum percentage allowed under the Dodd-Frank Act of 2010.

The second payout comes from a $500,000 penalty the agency collected from one of the defendants in the case. Other defendants are paying on a court-ordered schedule.

“This latest payment shows that the SEC’s aggressive collection efforts pay dividends not only for harmed investors but also for whistleblowers,” according to Sean McKessy, chief of the SEC’s Whistleblower Office.

“As we collect additional funds from securities law violators, we can increase the payouts to whistleblowers,” he said.

Under Dodd-Frank, the SEC’s whistleblower program rewards individuals who offer high-quality original information that leads to an SEC enforcement action in which more than $1 million in sanctions is ordered.

Awards can range from 10 to 30 percent of the money collected. 

The SEC’s April 4, 2014 release is here.


Julie DiMauro is the executive editor of FCPA Blog and can be reached here.

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