On Friday, July 17, the Securities and Exchange Commission (SEC) announced that it will award more than $3 million to a company insider who helped the SEC “crack a complex fraud.”

The SEC’s whistleblower program was adopted under the Dodd-Frank Act of 2010. It rewards high-quality, original information that results in enforcement actions exceeding $1 million. Awards are paid through an investor protection fund financed through enforcement actions.

In this case, the whistleblower divulged information that “… comprehensively laid out the fraudulent scheme which otherwise would have been very difficult for investigators to detect.”

A second whistleblower was denied an award because, among other factors, the claimant did not “provide information that led to the successful enforcement of that action within the meaning of Section 21F(b)(1) of the Exchange Act and Rules 21F-3(a)(3) and 21F-4(c) thereunder,” and the SEC determined that there was an unreasonable delay in the claimant reporting the illegal conduct.

Andrew Ceresny, director of the SEC’s Division of Enforcement, noted that insiders may hold the key to helping SEC investigators decipher “intricate fraudulent schemes.” He stated, “By providing significant financial incentives for people to come forward, the SEC’s whistleblower program continues to be profoundly effective in helping us protect investors and hold wrongdoers accountable.”

The SEC is required to protect the anonymity of whistleblowers and does not disclose information that might directly or indirectly reveal a whistleblower’s identity by law.

Since 2011, the SEC’s whistleblower program has paid out more than $50 million in awards to whistleblowers. This includes $30 million awarded to a claimant in 2014, which is its largest whistleblower award to date.

This most recent award is another reminder that a company should take prompt action to address misconduct within its ranks. It is important to have internal compliance programs that are communicated and followed throughout the organization, so if a complaint is ever made, the organization can show the regulator(s) that proper steps were taken to investigate and correct any illegal action(s) outlined in the complaint or uncovered as a result of the investigative process.