The shudder felt in C-suites across the country in late July was not an earthquake, but the trembling of corporate executives and general counsels contemplating back-to-back events that could presage a much more aggressive approach to securities law violations by the Securities and Exchange Commission and the Commodity Futures Trading Commission. The Dodd-Frank financial reform bill signed into law on July 22 includes a provision that mandates the SEC, as well as the CFTC, to award a bounty of 10% to 30% to any whistleblower who provides significant information about securities fraud involving a public company, or even a private company owned by a public company, that results in a judgment in excess of $1 million.

On July 23, the SEC granted an unprecedented $1 million bounty to Karen Kaiser and her husband Glen, of Southbury, Conn., because she provided data that helped the agency win a $28 million settlement, including a $10 million penalty, against hedge fund Pequot Capital Management.

The insider trading case involved Kaiser's ex-husband, former Microsoft employee David Zilkha, who is alleged to have received $2.1 million from Pequot in exchange for information about a Microsoft earnings report. (Zilkha denies any wrongdoing and is challenging the SEC in an administrative hearing set for this fall.)

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