The award represents 30 percent of the amount collected in the SEC enforcement action against the perpetrators of the scheme, the maximum percentage payout allowed under the law. The additional payout comes after the SEC collected an additional $500,000 from one of the defendants in the case.
"This latest payment shows that the SEC's aggressive collection efforts pay dividends not only for harmed investors but also for whistleblowers," said Sean McKessy, chief of the SEC's Whistleblower Office. "As we collect additional funds from securities law violators, we can increase the payouts to whistleblowers."
The SEC expects to collect additional money from defendants in this case as some are making payments under a periodic payment schedule ordered by the court.
The 2010 Dodd-Frank Act authorized the whistleblower program to reward individuals who offer high-quality original information that leads to an SEC enforcement action in which more than $1 million in sanctions is ordered. Awards can range from 10 percent to 30 percent of the money collected. The Dodd-Frank Act included enhanced anti-retaliation employment protections for whistleblowers and provisions to protect their identity. The law specifies that the SEC cannot disclose any information, including information the whistleblower provided to the SEC, which could reasonably be expected to directly or indirectly reveal a whistleblower's identity.
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The attorneys at Sallah Astarita & Cox, LLC represent all participants in the securities markets,including whistleblowers. For a free consultation call 212-509-6544.
