In the first of what the SEC hopes will be many more such awards, a whistleblower has received $50,000 for his or her help in stopping a multi-million dollar fraud. More money may be forthcoming for the individual if other, related cases move forward. The first award comes about a year after the whistleblower program began operating.
At a time when fraud in the financial services industry remains maddeningly difficult to root out and stop, the SEC hopes to use this expanded award program to avert future Bernie Madoff-style affinity scams, along with fraudulent schemes in all their manifestations. The commission also aims to vastly improve on the results of its last whistleblower-type program, known as the bounty program, which was limited to insider trading violations. In its 20 years of existence, that program produced a mere nine payouts to informants out of 15 claims, according to SEC spokesman John Nester.
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