Whistleblower Program Netting Tips and More
For more than a year, whistleblowers throughout United States and the world have been coming forth with inside information regarding alleged fraud and securities violations as part of the Securities and Exchange Commission’s Whistleblower Program.
Under the new program, tipsters whose information turns out to be crucial to a case could receive a substantial reward: 10% to 30% of the penalties over $1 million. To provide the payouts, the SEC has set aside more than $450 million from past penalties and fines in an investor protection fund.
The Whistleblower Program is the result of the 2010 financial overhaul of the Dodd-Frank Act. The Commodity Futures Trading Commission started its own whistle-blower bounty program in January.
As reported in an Aug. 22 article by the Los Angeles Times, so far the SEC has fielded tips from an array of insiders, including current and former employees, board members, former spouses and some compliance officers. Tips also have come from sources inside financial firms.
In August 2012, a whistleblower who helped the SEC stop a multimillion-dollar fraud received nearly $50,000 as part of the new Whistleblower Program. It is the first payout made under the program.
Maddox Hargett & Caruso is currently assisting whistleblowers. If you believe your company might be participating in securities fraud, please contact us. We will keep your information confidential and protected.