The Securities and Exchange Commission Friday launched its whistleblower program, launching a Web page to collect “original information’’ about securities laws violations.
The launch is a result of the Dodd-Frank Wall Street Reform and Consumer Protection Act. If a person supplies “new and timely information” about any securities law violation, that person is eligible for a financial reward.
The award will be paid out of a successful SEC enforcement action that results more than $1 million in monetary sanctions. Under the program eligible whistleblowers (defined below) are entitled to an award of between 10% and 30% of the monetary sanctions collected in actions brought by the SEC and related actions brought by other regulatory and law enforcement authorities.
The program also prohibits retaliation by employers against employees who provide us with information about possible securities violations.
The SEC's new page includes information on eligibility requirements, directions on how to submit a tip or complaint, instructions on how to apply for an award, and answers to frequently asked questions.
"Early and quick law enforcement action is the key to preventing securities fraud and avoiding investor losses, and the whistleblower program gives us the tools to help achieve that goal," said Robert Khuzami, Directof of the SEC's Division of Enforcement.
Heading the program is Sean McKessy, former corporate secretary for both Altria Group, Inc. and AOL Inc.
The SEC adopted final rules on May 25 to implement the whistleblower program. Individuals wishing to be considered for an award under the Whistleblower Program are required to submit an online questionnaire or the newly approved Form-TCR.