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The SEC announced the increase in its Nov. 17
annual report, which tracks the success of the whistleblower
program and how much it pays out each year in awards.
Fiscal 2014, which ended Sept. 30, marked a record year for the
SEC's program, both in terms of the number of tips received and
the amounts it awarded tipsters.
It authorized awards for nine whistleblowers, including a record
payout of more than $30 million to a whistleblower overseas who
had helped alert the SEC to what it described as an ongoing
fraud.
The 2010 Dodd-Frank Wall Street reform law gave the SEC the
power to start a whistleblower program that lets the agency
reward people who report misconduct, if that tip leads to the
collection of more than $1 million in monetary sanctions.
The program was inspired in part by the Bernard Madoff scandal,
in which the SEC received numerous tips about his Ponzi scheme
but failed to detect the fraud for decades.
According to the SEC's report, the agency received 3,620 tips
from whistleblowers in fiscal 2014, compared with 3,238 in
fiscal 2013.
The SEC said it fielded over 2,700 phone calls from members of
the public. It received tips from every state as well as
Washington, D.C. and Puerto Rico. The states where the most tips
originated included California, Florida, New York and Texas.
It also got tips from outside the United States, with the bulk
of those coming from Britain, India, Canada, China and
Australia.
The SEC added that "significant" additional payments also were
made to people who received awards in other years because it has
since been able to collect more money from a variety of
enforcement actions.
One whistleblower, for example, saw the award increase from an
initial $50,000 to more than $385,000.
At the same time, the SEC's report also discussed some of the
tips it has rejected during the fiscal year.
In one extreme example, the SEC said it rejected 143 claims
submitted by one individual whom the SEC accused of making
"false and baseless claims" that harmed the rights of legitimate
whistleblowers. The SEC said it previously had rejected another
53 claims from the same person.
(Reporting by Sarah N. Lynch; Editing by Paul Simao)
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