According to Sean McKessy, the head of Securities and Exchange Commission’s Whistleblower Office, the agency has a $453 million fund from which to award bounties under its new whistleblower program. Kessey recently spoke during a BNA webinar.
The 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act requires that certain whistleblowers receive 10-30% of an award in a successful prosecution or action. The percentage of the award will depend on the how significant the information the whistleblower provided was to the outcome of the action, how much help he/she gave, and the SEC’s degree of interest in stopping certain kinds of misconduct, such as insider trading. The percentage awarded remains at the SEC’s discretion.
As our securities fraud lawyers mentioned in a recent blog post, there have been mixed reactions over whether someone who decides to turn whistleblower should go to an employer first before going to the SEC. House Republicans have even introduced a new bill that would mandate that a whistleblower have reported its information internally in order to qualify for part of the whistleblower bounty. For now, however, while the new program offers incentives for a whistleblower to go inside the corporation with his/her information first, the SEC doesn’t require it. ( As noted by McKessey, that the final rules left on this requirement “evidence a determination that doing so could be detrimental to the program and inconsistent with the statute.”) For example, if an employee were to report an issue to internal compliance, which then resulted in the company launching a probe and discovering additional violations, under the SEC’s incentive program, the whistleblower to be eligible for a bounty amount that would factor in all violations and not just the one that he/she initially reported.
If you suspect that your broker-dealer is engaged in financial fraud, you may want to come forward to voice your concerns and consider filing a whistleblower lawsuit. If you are a victim of securities fraud, you may be able to recover your losses.
Contact our stockbroker fraud attorneys today.
SEC Has $453 Million Fund for Awards of Whistleblower Bounties, US Law Watch, July 22, 2011
More Blog Posts:
Whistleblower Lawsuit Claims Taxpayers Were Defrauded When Federal Government Bailed Out Houston-Based American International Group in 2008, Stockbroker Fraud Blog, May 5, 2011