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SEC Whistleblower Program Pays Out First-Ever Award of $50,000

Bruce Carton | August 21, 2012

The SEC announced today that its Whistleblower Office has issued the first-ever award to a whistleblower. The award of $50,000 was authorized under the high-profile program established under Dodd-Frank in 2010. For several months, there have been rumblings in the quickly-growing whistleblower bar that an award might be imminent. Sean McKessy, chief of the SEC's Whistleblower Office, has declined to confirm those rumors, but said in late May that he was hopeful that the first payouts would come soon and be substantial to help motivate people who might be considering bringing a tip to the government.

The recipient of the $50,000 award did not wish to be identified. The SEC stated that this whistleblower provided documents and other information that helped the SEC obtain more than $1 million in sanctions, of which approximately $150,000 has been collected to date. Although whistleblower awards can can range from 10 percent to 30 percent of the money collected, at the SEC's discretion, the $50,000 award in this case is 30 percent of the amount collected--the maximum percentage payout allowed under the whistleblower law. The SEC stated that "any increase in the sanctions ordered and collected will increase payments to the whistleblower."

In announcing the award, McKessy noted that the SEC is receiving about eight tips a day under the whistleblower program. “The fact that we made the first payment after just one year of operation shows that we are open for business and ready to pay people who bring us good, timely information,” he added.