The SEC on Nov. 3 proposed new rules that would allow the agency to pay whistle-blowers from 10% to 30% of the monetary sanctions collected as a result of tips about securities violations.
The rewards — required by the Dodd-Frank Wall Street Reform and Consumer Protection Act — would not be available to “people who mastermind the very crime they are reporting,” SEC Chairwoman Mary Schapiro said at an SEC meeting.
The payments, according to the text of the Dodd-Frank provision, will be made only in cases where the tips lead to “judicial or administrative” actions that result in sanctions of more than $1 million. “This type of information can be crucial to protecting investors or helping us return their funds,” Ms. Schapiro said in a statement Nov. 3.
Public comments on the proposed rules will be accepted until Dec. 17, according to John Heine, an SEC spokesman.