SEC Lets Whistleblowers Bypass Internal Programs

New rules will provide award of up to 30% of penalties for tips on financial wrongdoing

The U.S. Securities and Exchange Commission will let corporate whistle-blowers collect as much as 30 percent of penalties when they report financial wrongdoing, even when they bypass companies’ internal complaint systems.

SEC commissioners voted 3-2 today in Washington to establish a whistle-blower program to “reward individuals who provide the agency with high-quality tips that lead to successful enforcement actions.” The program, part of the SEC’s rulemaking under the Dodd-Frank Act, expands a bounty system that was previously limited to insider-trading cases.

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