Money BagThe SEC Office of the Whistleblower recently announced that the first-ever whistleblower award under the Dodd-Frank Whistleblower Program will be increased by $150,000 based on additional assets the SEC collected from one the defendants in the case.

In August 2012, the SEC paid its first-ever bounty award to a tipster in accordance with the whistleblower provisions in Dodd-Frank.  That award initially totaled nearly $50,000, and was paid to an unidentified individual who, according to the SEC, “provided documents and other significant information” that accelerated the agency’s investigation, prevented the “fraud from ensnaring additional victims,” and led to court-order sanctions totaling over $1 million.  The SEC stated at that time that the award represented 30 percent of the sanctions collected thus far—the maximum percentage payout allowed under Dodd-Frank—and “any increase in the sanctions ordered and collected will increase payments to the whistleblower.”

Last week, the SEC announced that the tipster will get an additional $150,000 based on an additional collection of funds from one of the defendants.  Sean X. McKessy, Chief of the SEC Office of the Whistleblower, stated that “this latest payment shows that the SEC’s aggressive collection efforts pay dividends not only for harmed investors but also for whistleblowers.”  The SEC further added that the agency “expects to collect additional money from defendants in this case,” suggesting that this whistleblower may be awarded even more money.

This additional whistleblower award and the SEC’s willingness to increase award payouts as additional funds are collected are likely to encourage more tips.  Employers continue to have a very real need to step-up compliance programs and encourage employees to use them.