(Bloomberg News) The U.S. Securities and Exchange Commission took a step toward expanding its ability to reward whistleblowers after the Dodd-Frank financial rules overhaul provided greater incentives for tipsters to come forward.

SEC commissioners voted 5-0 today to propose a rule that authorizes the agency to pay whistleblowers in enforcement cases where sanctions exceed $1 million. Under the proposal, the agency could give claimants as much as 30 percent of all the money it collects when imposing fines or recouping ill-gotten gains. Awards are currently capped at 10 percent of collected money and limited to insider-trading cases.

"Whistleblowers can be a source of high-quality leads," SEC Chairman Mary Schapiro said at a meeting in Washington. "They can provide us with first-hand information about ongoing frauds that may otherwise not come to light. This type of information can be crucial to protecting investors or helping us return their funds."

In approving Dodd-Frank in July, Congress gave the SEC authority to increase awards for whistleblowers after lawmakers faulted the agency for fumbling tips about Bernard Madoff's Ponzi scheme. The agency has been working for more than a year to improve its system for responding to tips by hiring consultants and studying more successful programs at the Internal Revenue Service and Justice Department.

SEC Commissioner Kathleen Casey, a Republican, said bigger awards may trigger a rush of tips that overwhelm the agency's enforcement division with "erroneous or frivolous" complaints.

Lawyers representing corporations have raised concerns that the expanded authority granted to the SEC will prompt employees to take grievances to regulators instead of going through programs companies set up to investigate complaints internally.