The U.S. Securities and Exchange Commission took a step toward expanding its ability to reward whistleblowers after the Dodd-Frank financial rules overhaul provided greater incentives for tipsters to come forward.
SEC commissioners voted 5-0 today to propose a rule that authorizes the agency to pay whistleblowers in enforcement cases where sanctions exceed $1 million. Under the proposal, the agency could give claimants as much as 30 percent of all the money it collects when imposing fines or recouping ill-gotten gains. Awards are currently capped at 10 percent of collected money and limited to insider-trading cases.
“Whistleblowers can be a source of high-quality leads,” SEC Chairman Mary Schapiro said at a meeting in Washington. “They can provide us with first-hand information about ongoing frauds that may otherwise not come to light. This type of information can be crucial to protecting investors or helping us return their funds.”