SEC offers lucrative bounties to whistle-blowers
The U.S. Securities and Exchange Commission seal hangs on the facade of its building in Washington, D.C.
TEXT OF INTERVIEW
Steve Chiotakis: Wall Street and the business world are still trying to unwind the sweeping financial regulation overhaul President Obama signed into law last week, and one part of that law getting some attention offers whistle-blowers lucrative bounties for spilling the beans on wrongdoers. Reporter Janet Babin is with us live this morning to talk about it. Good morning, Janet.
Janet Babin: Hey Steve.
Chiotakis: So how big are these rewards?
Babin: Well under the new law, anyone who tells the SEC about violations and they lead to the SEC collecting $1 million, that person will receive up to 30 percent of the amount their information brings in. So 30 percent of a million bucks, not bad. They'll also get to remain anonymous until their cash reward is paid out to them. Stephen Crimmins is a partner with the law firm K&L Gates, he represents clients in SEC enforcement investigations:
Steve Crimmins: The lawyer now can tell them, look, you have an option here, you can go into the SEC, you can qualify for the tremendous bounty that Congress has said the SEC can pay. And if they're on the edge of the misconduct, the SEC will quite probably give them a cooperation agreement which will protect them from prosecution.
So Crimmins says lower-level workers on the edge of this wrongdoing are now going to have a place to turn, and this is really going to make the SEC more effective.
Chiotakis: And Janet, where is this big reward money going to come from?
Babin: So the SEC, they're going to pay whistle-blowers out of a new stash of money called the Investor Protection Fund. And the money in that fund, Steve, is going to come from money the SEC collects from other cases. So it's going to be self-funded.
Chiotakis: Mmm, all right. Janet Babin, reporting live this morning. Janet, thanks.
Babin: Thank you.