By Hal M. Bundrick
NEW YORK (MainStreet) Under two months ago, the Securities and Exchange Commission's office of the Whistleblower (OWB) announced the largest award since the program began: a $14 million bounty for information that led to the recovery of "substantial investor funds."
The result? Increased awareness for a program seeking tips to stem investor fraud.
"This will open the floodgates -- the higher the lottery ticket the more people play," says Jordon Thomas, a partner with Labaton Sucharow. Thomas's practice concentrates on investigating and prosecuting securities fraud on behalf of whistleblowers and institutional clients.
"In the recent Wall Street Survey commissioned by Labaton Sucharow, there was a 20% increase in awareness of the SEC Whistleblower Program since last year," Thomas told MainStreet. "Following this significant award, awareness will continue to grow along with the number of whistleblower submissions that the SEC receives. At our firm, after the award was announced, we saw an immediate increase in the number of case evaluation requests that we received."
The OWB reports the number of whistleblower tips and complaints the Commission received increased from 3,001 for the 2012 fiscal year to 3,238 in 2013. Since the program was established in August 2011, the Commission has received 6,573 tips and complaints from whistleblowers.
It's quite possible even more substantial awards will be offered to tipsters in the future. Under the program, individuals who voluntarily provide the Commission with original information that leads to a successful enforcement action resulting in monetary sanctions of over $1,000,000, may be eligible to receive an award equal to between 10 and 30% of the monies collected by the Commission.