The U.S. Securities and Exchange Commission’s offer of huge payouts for details on Wall Street wrongdoing hasn’t stopped whistle-blowers who want quick results from calling New York’s top cop.

A tip that helped spur New York Attorney General Eric Schneiderman’s June lawsuit against Barclays Plc was first shopped to the SEC, as was another that triggered his investigation into a controversial trading practice at BlackRock Inc., said people with direct knowledge of the matter. By going to Schneiderman, informants risk hurting their chances of collecting as much money as possible from the SEC.

The SEC, responding to its failures to police Wall Street before the 2008 credit crunch, tried to improve its bounty program with input from the Internal Revenue Service and other government agencies that have long paid whistle-blowers. While the overhaul benefited from congressional approval to offer bigger rewards in a wider swath of cases, informants say they’re frustrated by the SEC’s slow process.

“The SEC receives thousands of whistle-blower tips every year, which they can only investigate a fraction of,” said Jordan Thomas, a former SEC enforcement attorney. At the same time, “an individual investigation can take years to complete due to the sheer amount of discovery that is required to successfully put a case together,” he said.

The SEC lobbied lawmakers to pay whistle-blowers more money on the premise that a regulator with limited resources will always be outgunned by the financial industry unless it can entice Wall Street insiders to come forward with first-hand knowledge of securities fraud.

$30 Million Award

Congress granted its wishes with the 2010 Dodd-Frank Act, which allows the SEC to offer awards in any case that triggers a sanction exceeding $1 million and entitles informants to as much as 30 percent of the money collected from wrongdoers. Previously, the SEC could only pay insider-trading tipsters and claimants were eligible for just 10 percent of fines. The agency announced its biggest award to date, more than $30 million, last month.

“I am very proud of all that the office of the whistle-blower has accomplished in its very short existence,” said Sean McKessy, the official who has run the SEC’s revised bounty program since its creation in 2011. “We are attracting high- quality intelligence from around the world that has assisted and continues to assist enforcement staff in conducting efficient investigations.”

Unfair Trading

Leveraging tipsters is even more important for Schneiderman, whose staff includes about two dozen lawyers focused on financial-industry investigations. Since taking office in 2011, Schneiderman has courted whistle-blowers by saying he’s eager to uncover unfair trading advantages on Wall Street.