An SEC initiated program pays whistleblowers who help the Securities and Exchange Commission to uncover fraud. The first whistleblower to get the 50 thousand dollar reward for his efforts at whistleblowing helped to end a fraud that involved millions of dollars in the securities and exchange industry. According to the SEC, the fifty thousand dollar award was 39 % of the total sum charged to the criminals who were defrauding victims in the securities and exchange industry.
The 30% of the amount charged to criminals who are discovered through a whistleblowers intervention is the most that can be given to a whistleblower by the SEC. The chairman of the SEC Mary L. Schapiro thinks that the program to pay off whistleblowers is a tremendous success and will be a major pay in the SEC attempts to stop fraud in the securities and exchange industry. The first whistleblower to get the fifty thousand led to a million dollar fine against the fraudsters; however, only one hundred and fifty thousand has been collected to date according to the SEC. If the SEC collects more of the fine from the fraudster, the whistleblower will get more money up to 30% of all monies actually collected according to Robert Khuzami who is currently the Director in charge of Enforcement in collecting fines charged by the SEC to discovered fraudsters.
The program is said to be very helpful in protecting investors from fraudsters who would go undetected if not for the intervention of whistleblowers. The SEC whistleblower program pays whistleblowers from money collected only upon the successful discovery and subsequent charging of a discovered securities fraud criminal and only when the fines charged to the criminal are collected by the enforcement end of the SEC protection industry.
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SEC Whistleblower Program 