SEC Announces Whistleblower Fund Totals Over $450 Million
The Securities and Exchange Commission has announced that it has set aside over $450 million for payments to outside whistleblowers whose information results in the conviction or penalization of companies or individuals of securities fraud. A report issued recently by the SEC shows that the agency has put $451.9 million into a new fund to pay whistleblowers. The Dodd-Frank Act stipulated that this fund must comprise at least $300 million. To be eligible to receive an award, a whistleblower’s information must lead to a successful SEC or CFTC (Commodities Futures Trading Commission) recovery. Specifically, the whistleblower must have voluntarily provided the SEC with “original information about a violation of the federal securities laws that leads to the successful enforcement of a covered judicial or administrative action, or a related action.”
The SEC set up the program in accordance with The Dodd-Frank Wall Street Reform and Consumer Protection Act enacted in July. This financial overhaul law also creates a new whistleblower office at the SEC. The law follows intense public criticism of the agency for the breakdown that allowed Bernard Madoff’s multibillion-dollar fraud to go undetected for more than 15 years, despite numerous red flags raised by whistleblowers, but ignored by the SEC.
Thanks to the generous new program which rewards tipsters for providing “original information” with anywhere from 10% to 30% of any sanctions levied by the SEC in cases involving at least $1 million in penalties, whistleblowers have stepped up their efforts. According to the SEC, the Act is leading to an increase in high-quality tips. Kenney & McCafferty possesses the necessary experience in both civil and criminal tax matters to safely navigate the whistleblower through the difficult process of reporting tax fraud.
This entry was posted on Thursday, December 2nd, 2010 at 10:53 am and is filed under Corporate Tax Fraud, Estate Tax Fraud, SEC Whistleblower Program. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.