* Whistleblower's documents, information helped stop a
* New program required by Dodd-Frank, finalized in 2011
Aug 21 U.S. securities regulators have approved
a nearly $50,000 reward for a whistleblower who turned over
documents and other information to help stop a multi-million
dollar fraud, the first award in a new program to encourage
people to tell regulators about securities fraud.
The whistleblower, who was not identified, provided
information that helped speed an investigation and resulted in a
court imposing more than $1 million in sanctions, the U.S.
Securities and Exchange Commission said on Tuesday.
"Had this whistleblower not helped to uncover the full
dimensions of the scheme, it is very likely that many more
investors would have been victimized," said Robert Khuzami,
director of the SEC's enforcement division.
The tipster will receive 30 percent of the about $150,000
collected so far, out of more than $1 million in sanctions
imposed, the maximum award percentage allowed under new
whistleblower rules required by the 2010 Dodd-Frank financial
oversight law and finalized by the SEC last year.
The SEC did not disclose the exact amount of the sanctions
or other details of the fraud to avoid identifying the case.
A second person who offered information in the case was not
rewarded because the tip did not significantly help the
enforcement case, the SEC said.
Before Dodd-Frank, the SEC could only reward people who
provided information on insider-trading cases. The 2010 law
allows regulators to reward people whose information leads to an
SEC enforcement action with more than $1 million in sanctions.
Many companies, including Google Inc and JPMorgan Chase &
Co, had complained that the expanded whistleblower incentives
could undermine internal compliance programs because they do not
require people to first report problems to the company.
The program does offer people who report wrongdoing to the
company as well as the SEC better chances of receiving a higher
The regulator has received about eight tips per day since
the program started in August 2011, the SEC said.