The Securities and Exchange Commission yesterday granted the first whistleblower award under the new program created by the Dodd-Frank Act. The reward totaled $50,000, or thirty percent of the SEC's current recoveries from the case, which is the maximum percentage allowed under the program.
The SEC has kept the whistleblower's identity anonymous, as allowed under Dodd-Frank, and the SEC did not release any information about the type of fraud involved in the case.
Under the Dodd-Frank Act of 2010, the SEC's whistleblower program was expanded to encourage individuals to come forward with well-timed and high quality information about large-scale fraud, by incentivizing their work (whistleblowers are awarded 10-30 percent of the total money recovered in each case), and offering job protection. The information provided to the SEC must be detailed and comprehensive enough to launch investigations, and must result in enforcement and minimum penalties of $1 million.
The Wall Street Journal story included comments made by Erika Kelton, a whistleblower attorney at Phillips & Cohen LLP, noting that she "praised the SEC for moving swiftly to issue its first award and for setting it at the maximum percentage payout."
Phillips & Cohen represents whistleblowers under the SEC program, as well as in qui tam cases and whistleblower claims with the Internal Revenue Service and the Commodity Futures Trading Commission.