SEC Sets Aside $452 Million for Whistleblowers
by
Oct 30th 2010 11:10AM
Updated Oct 31st 2010 9:50AM
A new report from from the Securities and Exchange Commission shows that the agency has set aside $452 million to establish a new "whistleblower" fund.
Earlier this year, as part of sweeping financial reform regulation, the SEC received more authority to pay whistleblower awards and enhance the anti-retaliation protections available to whistleblowers.
For nearly two years, the agency has been shamed by critics for lapses that they said allowed crimes like the Ponzi scheme managed by jailed ex-financier Bernard Madoff to continue for so long. SEC officials are hoping that the fund will offer an incentive for people to speak up if they are aware of a financial fraud that is being committed.
In order for an person to qualify for a payout, the amount collected due to a sanction must be over $1 million. Based on the amount of the monetary sanctions collected when the agency brings successful action, 10% to 30% of the money goes to a whistleblower. Also, the whistleblower must have voluntarily provided the SEC with "original information about a violation of the federal securities laws that leads to the successful enforcement of a covered judicial or administrative action, or a related action."
Earlier this year, as part of sweeping financial reform regulation, the SEC received more authority to pay whistleblower awards and enhance the anti-retaliation protections available to whistleblowers.
In order for an person to qualify for a payout, the amount collected due to a sanction must be over $1 million. Based on the amount of the monetary sanctions collected when the agency brings successful action, 10% to 30% of the money goes to a whistleblower. Also, the whistleblower must have voluntarily provided the SEC with "original information about a violation of the federal securities laws that leads to the successful enforcement of a covered judicial or administrative action, or a related action."
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