New Rules Offer Big Cash Rewards to Whistleblowers

In an article from Yahoo! Finance, new rules adopted by federal regulators on Wednesday could result in large cash awards to those whistleblowers who report corporate fraud.  From the article:

Tipsters would be eligible if they give the Securities and Exchange Commission information that leads to an enforcement action resulting in more than $1 million in penalties. The SEC would pay up to 30 percent of the money it recovers from a company or person.

The new rules would seek to discourage employees from bypassing their companies’ compliance programs. Once employees report potential wrongdoing to their company, the SEC would officially designate them as whistleblowers, potentially eligible for awards — provided they give the SEC the same information within 120 days.

In addition, the SEC will credit whistleblowers whose companies pass their information to the agency, even if the whistleblowers themselves do not. That way, whistleblowers could receive awards by reporting wrongdoing internally to their companies.

You can read the full article here on the Yahoo! Finance website.