Almost a year after launching a new program to get people to blow the whistle on corporate wrongdoing, the Securities and Exchange Commission handed out its first award.
An unidentified informant who helped the Wall Street watchdog stop a multimillion-dollar fraud collected a $50,000 bounty under the agency’s whistle-blower program, the SEC said yesterday.
That’s 30 percent — the maximum percentage allowed under the law — of the $150,000 in sanctions the SEC has collected in the case so far. The agency said it is seeking up to $1 million and so the whistle-blower stands to receive additional payouts.
The SEC is dangling bigger bounties as part of a new program authorized under the Dodd-Frank financial reform act. The program promises payments of up to 30 percent to those who help uncover fraud and other corporate abuses that lead to sanctions of at least $1 million.
“Had this whistle-blower not helped to uncover the full dimensions of the scheme, it is very likely that many more investors would have been victimized,” said Robert Khuzami, head of the SEC’s Division of Enforcement.