On Thursday, the Securities and Exchange Commission reversed an earlier decision and decided to award a $400,000 bounty to a whistleblower. The claim, which reported fraud to the SEC, was initially dismissed because a self-regulatory organization was already investigating the matter.

Due to anonymity protections, SEC background on the case was sparse. This whistleblower provided the agency with “specific, timely, and credible information” after having tried, “on several occasions and through several mechanisms,” to have the matter addressed internally at the company, a statement says. A twist on the case is that the claim was initially denied “because the information did not appear to have been ‘voluntarily’ provided… because of a prior inquiry into the matter conducted by a self-regulatory organization,” the SEC order says. The whistleblower’s appeal of that decision, however, persuaded officials that he or she was “engaged in diligent efforts to correct and to bring to light the underlying misconduct in this case.”

“Based on our fuller understanding of the relevant events, which we consider to be materially significant extenuating circumstances, we therefore believe it appropriate in the public interest and consistent with the protection of investors to waive the ‘voluntary’ requirement,” the SEC wrote. “Although not an independent basis for our conclusion, we nonetheless are mindful that the claimant’s interactions with the SRO occurred prior to either our proposal or adoption of Rule 21F-4(a), which created incentives, as part of our whistleblower program, for whistleblowers to report original information to the Commission before they are approached by an SRO in connection with an investigation or an examination.”

The SEC’s Office of the Whistleblower was authorized by the Dodd-Frank Act and established in August 2011.  The program rewards information that results in an enforcement action with sanctions exceeding $1 million. The awards can range from 10 percent to 30 percent of the money collected in a case