(Bloomberg News) The U.S. Securities and Exchange Commission set aside about $452 million to reward tipsters under new authority granted by the Dodd-Frank law, the agency said in a report to Congress posted on its Web site.
Whistleblowers who help the SEC prosecute fraud cases will receive as much as 30% of the money the agency collects in cases where sanctions reach at least $1 million.
Congress gave the SEC the authority to increase bounties and awards for whistleblowers after faulting the agency for missing Bernard Madoff's Ponzi scheme and failing to curb Wall Street practices that contributed to the 2008 financial crisis. Before the Dodd-Frank law was enacted, the SEC could only reward tipsters in insider trading cases.
The agency has yet to pay any whistleblowers under the new authority and is still drafting rules to define the program, the report said. The fund, which also finances the SEC's inspector general's office, is financed by a portion of monetary sanctions collected by the SEC that aren't paid to harmed investors, the report said.