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20:06 BST, September 22, 2014Someone who gave out information regarding securities fraud enforcement action has been awarded $30 million for speaking out, according to a government watchdog agency.
The Securities and Exchange Commission (S.E.C) stated that it had paid between $30-35 million to an unnamed person oversees that helped the agency “detect an ongoing fraud”.
It is the largest award ever handed out by S.E.C under the whistle-blower law, a law that was put through in the Dodd-Frank act.
Andrew Ceresney, director of the S.E.C.’s Division of Enforcement, said:
“This whistleblower came to us with information about an ongoing fraud that would have been very difficult to detect.”
“This record-breaking award sends a strong message about our commitment to whistleblowers and the value they bring to law enforcement.”
The S.E.C. stated that the person could have been given a lot more compensation had he acted sooner in providing the information. The delay in coming forward resulted in investors continuing “to suffer significant monetary injury that otherwise might have been avoided.”
Erika A. Kelton, a lawyer for the whistle-blower, said:
“I think what my client did was totally reasonable. I don’t think it was delayed and I don’t think it was delayed unreasonably. I think the S.E.C. is wrong to suggest that people have an obligation to come forward before there were the protections of the S.E.C. program.”
The unknown person provided information to the S.E.C. because he was concerned seeing traders “being cheated out of millions of dollars.” The person commented that “deception had become an accepted business practice.”
The whistle-blower law gives the S.E.C the right to award someone anywhere between 10 to 30 percent of the amount collected by authorities through the information provided.
According to the SEC, whistleblowers have helped it collect over one billion dollars in fines and sanctions.
A whistleblower, also written whistle blower or whistle-blower, is somebody who exposes immoral, illegal, unethical or improper activity, usually in his or her place of work. To be a whistleblower requires great courage.