The SEC announced it will pay a whistleblower who lives abroad at least $30 million to $35 million for providing information and assistance that led to a substantial recovery by the federal government. The SEC declined to identify the tipster, where he or she is from or the case to which the award award was tied. The reward is more than twice the SEC’s highest prior award made to tipster under the Dodd-Frank whistleblower program created by Congress in 2010.
“This whistleblower came to us with information about an ongoing fraud that would have been very difficult to detect,” said Andrew Ceresney, director of the SEC’s division of enforcement, in a news release, reported by CNN Money.
“I was very concerned that investors were being cheated out of millions of dollars and that the company was misleading them about its actions,” the anonymous tipster said in a statement released from Washington law firm Phillips & Cohen LLP, which said it represented the tipster. “Deception had become an accepted business practice.”
The award comes less than a week after U.S. Attorney General Eric Holder said he intended to ask Congress to change a federal law to increase whistleblower awards, according to the Wall Street Journal.
The SEC started its program in 2011, and awards whistleblowers 10% to 30% of the money collected in a case. The agency has awarded 14 whistleblowers so far, reports the Wall Street Journal. Of those, four were tipsters who lived outside the United States, and nine of the awards were made this year, according to CNN Money.
“Whistleblowers from all over the world should feel similarly incentivized to come forward with credible information about potential violations of the U.S. securities laws,” said Sean McKessy, the SEC’s whistleblower chief, according to the Wall Street Journal.
The Wall Street Journal reported that the $30 million to $35 million award might have been bigger had the tipster acted faster, but the agency reduced the award because the tipster delayed in reporting the misconduct after first becoming aware of it, according to the heavily redacted SEC order making the award.
The SEC’s biggest award still falls short of the $104 million whistleblower award the Internal Revenue Service gave to former UBS (UBS) banker Bradley Birkenfeld, according to CNN Money.
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