On August 21, 2012, the Securities and Exchange Commission ("SEC") announced that it has paid out the first award under its whistleblower award program, which was established under the 2010 Dodd-Frank Act a little more than a year ago. The SEC established the whistleblower program to allow it to award between 10% and 30% of the money it collects in an enforcement action to individuals who provide information of securities fraud that significantly contributes to the SEC enforcement action in which more than $1 million dollars in sanctions are imposed. In the first action, the SEC awarded an unidentified whistleblower $50,000 for significant information that lead to an enforcement action that stopped a multi-million dollar fraud. In that enforcement action, the court imposed sanctions of $1,000,000 of which $150,000 has been paid to date. The SEC noted that the award recipient "provided documents and other significant information that allowed the SEC’s investigation to move at an accelerated pace and prevent the fraud from ensnaring additional victims." In a second action, the SEC denied an award in the same action because "the information provided did not lead to or significantly contribute to the SEC’s enforcement action.
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SEC makes first whistleblower award
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