SEC’s Bull Market For Whistleblowers
Within the past year, whistleblowers inside of American corporations are divulging information about employers that could give them part of multi-million dollar penalties won by financial regulators under a Securities and Exchange Commission program. Whistleblowers are exposing more than simply names; they are turning over documentation including e-mails and audio recordings because they are motivated by cash and the turning in of wrongdoers. The director of the SEC’s whistleblower’s office, Sean McKessy, stated, “We are getting very, very high-quality information from whistleblowers.” As of August 12, about 8 tips per day for the past year, 2,870 tips total, have come in. On August 21, the first payout of $50,000 was given to a whistleblower who alerted regulators to investment fraud. Some observers question whether the SEC has enough resolve or resources to pursue difficult cases. Tipsters under this program, who have crucial information to a case, could get 10% to 30% of penalties over $1 million. The SEC has put aside $452 million from past fines and penalties in an investor protection fund to provide payouts to whistleblowers.
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