The Securities and Exchange Commission announced on Tuesday that it has issued the first $50,000 whistleblower award to a witness that assisted in a multi-million dollar fraud case.
Under the 2010 Dodd-Frank Act, the SEC is authorized to award whistleblowers between 10 and 30 percent of money collected in a case if the information supplied leads to an enforcement action by the regulator. Since the program took effect in August 2011, the SEC has received approximately eight leads each day, according to the Wall Street Journal.
“The fact that we made the first payment after just one year of operation shows that we are open for business and ready to pay people who bring us good, timely information,” Sean McKessy, the chief of the SEC’s whistleblower office, said, the Wall Street Journal reports.
Robert Khuzami, the director of enforcement at the SEC, said that if the whistleblower had not informed regulators, “it is very likely that many more investors would have been victimized,” according to the Wall Street Journal.
Though the SEC’s whistleblower division is new, whistleblowers have historically been able to collect rewards in cases where the government is being defrauded. The False Claims Act allows private citizens to file suit on behalf of the U.S., and the citizen is then able to collect a portion of the assessed penalties.