The Securities and Exchange Commission has launched a new 'whistleblower' program that includes a Web site for people to report securities violations and apply for a financial award.
The new program, launched last week, comes as a result of the Dodd-Frank Wall Street Reform and Consumer Protection Act, which provided the SEC with the authority to hand out financial rewards to whistleblowers who provide new and timely information about any securities law violations. To qualify for a reward, the whistleblower's information must lead to a successful SEC enforcement action with more than $1 million in monetary sanctions.
Prior to the enactment of the Dodd-Frank Act, the SEC only had authority to reward whistleblowers in insider-trading cases.
"Early and quick law enforcement action is the key to preventing securities fraud and avoiding investor losses, and the whistleblower program gives us the tools to help achieve that goal," said Robert Khuzami, director of the SEC's Division of Enforcement.
The program's Web site at www.sec.gov/whistleblower includes information on eligibility requirements, directions on how to submit a tip or complaint, instructions on how to apply for an award, and answers to frequently asked questions.
"Securities fraud is not a victimless crime," said Sean McKessy, chief of the SEC's Office of the Whistleblower. "That's why why it is so important for people to step forward when they witness an ongoing securities fraud or learn about one that has taken place or is about to occur. Our new whistleblower award program makes it easier for people to take that step."