SEC Awards First Dodd-Frank Whistleblower Payment
In August, the SEC made its first payout to a whistleblower under the Dodd-Frank Wall Street Reform and Consumer Protection Act. The sum was small—$50,000, or 30 percent of the amount collected so far. 30 percent is the maximum allowable under the whistleblower program, and 10 percent is the minimum. Future awards could far exceed $50,000; Dodd-Frank entitles whistleblowers to between 10 and 30 percent of collected sanctions for securities laws violations over $1 million.
According to a press release by the SEC, the whistleblower turned over documents that helped prevent a multi-million dollar fraud. The release is silent on the whistleblower’s identity or nature of the claim. The release does say, however, that the SEC has collected about $150,000 of the ordered $1 million in sanctions. The court may issue judgments against other defendants in the case that would increase the whistleblower payment.
The SEC set up the whistleblower program under Dodd-Frank about a year before it made the first payout. Since then, according to the chief of the SEC’s Whistleblower Office, “about eight tips a day are flowing into the SEC.”