The Securities and Exchange Commission (SEC) announced Aug. 21 that it made its first payout to a whistleblower under a program authorized by the Dodd-Frank Wall Street Reform and Consumer Protection Act. In a press release, Sean McKessy, chief of the SEC’s Office of the Whistleblower, declared the commission “open for business.”
The SEC says the whistleblower received around $50,000 for providing documents and other “significant information” that led to an accelerated investigation and enforcement action into a multimillion-dollar securities fraud—just the kind of information and cooperation the SEC had hoped the program would yield.
At around $50,000, the first reward is not enormous, easily overshadowed by the record $104 million IRS payment to whistleblower Bradley Birkenfeld announced just a few weeks later. However, according to the SEC, $50,000 represents 30 percent of the amount collected so far in the whistleblower-aided enforcement action—the maximum amount payable under the SEC program. It’s a strong signal to potential whistleblowers that the SEC is willing to pay the top amount for quality tips.