Litigation: SEC pays first whistleblower reward

This first reward does little to dispel criticisms of the whistleblower program

With the start of the NFL season comes a different kind of bounty program. The Securities and Exchange Commission (SEC) recently announced that it paid its first reward to a whistleblower under the Dodd Frank Act’s new whistleblower program. Federal regulators awarded almost $50,000 to an informant who helped the SEC tackle an investment firm engaged in fraud. The reward amounted to a 30 percent share of the sanctions collected to date—the maximum reward percentage allowed.

The whistleblower, who remains anonymous, provided information and documents to the SEC which ultimately led to the agency identifying and prosecuting the fraud. The law prohibits the SEC from disclosing any additional information about the informant, the investment firm or what documents and information the whistleblower provided.

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Matthew Ingber

Matthew Ingber is a litigation partner at Mayer Brown.

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