The Securities and Exchange Commission (SEC) has said that it will pay a whistleblower who lives in another country at least $30 million to $35 million for giving information and help that led to a big financial recovery for the U.S. government. The Securities and Exchange Commission did not say who gave the tip, where they were, or what it was about for which they were offering a reward.
In the Dodd-Frank whistleblower program, which was set up by Congress in 2010, this is more than twice as much as the previous largest reward given to a tipper by the SEC.
SEC report
According to CNN Money, Andrew Ceresney, director of the SEC’s division of enforcement, said in a news release, “This whistleblower came to us with information about an ongoing fraud that would have been very hard to find.”
In a statement given by the Washington law firm Phillips & Cohen LLP, which said it represented the tipster, the anonymous source said, “I was very worried that investors were being scammed out of millions of dollars and that the company was lying to them about its actions.”The use of deception as a standard operating procedure has become commonplace.”
According to the Wall Street Journal, the prize is being given out less than a week after U.S. Attorney General Eric Holder stated that he intended to petition Congress to modify a federal statute to raise the amount of money that can be awarded to whistleblowers.
The SEC started a program in 2011 that pays whistleblowers 10% to 30% of the money that is recovered from a case. The Wall Street Journal says that so far, the government has given 14 people awards for blowing the whistle. According to CNN Money, nine of the awards were given out this year, and of them, four were given to informants who were citizens of nations other than the USA.
The Securities and Exchange Commission‘s chief whistleblower officer, Sean McKessy, told the Wall Street Journal that “whistleblowers from all over the world should feel similarly encouraged to come forward with credible information about possible violations of U.S. securities laws.”
The Wall Street Journal said that the award of $30 million to $35 million could have been bigger if the tipper had acted faster. However, the agency cut the award because the tipper waited too long to report the wrongdoing after finding out about it, according to the heavily redacted SEC order making the award. The award was reduced by the agency because the tipster delayed reporting the misconduct after first becoming aware of it.
According to CNN Money, the largest award the SEC has ever given is still less than the $104 million reward the Internal Revenue Service gave to former UBS (UBS) banker Bradley Birkenfeld for reporting tax fraud.
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