By Ashley Lau
Nov 15 (Reuters) - The U.S. Securities and Exchange
Commission received more than 3,000 tips during the 2012 fiscal
year through its new whistleblower program that encourages
people to tell regulators about securities fraud, the agency
reported on Thursday.
Tips from the program, created under the 2010 Dodd-Frank
financial reform law, came from all 50 states and from 49
countries, according to the SEC report.
"Whistleblowers are now coming forward who in the past might
have remained silent," said former SEC assistant director Jordan
Thomas, who now chairs the whistleblower representation practice
at Labaton Sucharow in New York.
"The SEC whistleblower submissions could fully populate the
SEC pipeline for several years," said Thomas, who helped form
the current SEC whistleblower provisions.
The most common complaint category, roughly 18 percent of
those filed, related to corporate disclosures and financials.
Offering fraud and manipulation were the second and third most
common complaint categories.
California, with 435 tips, was the U.S. state where the most
tips originated, followed by New York, which had 246 tips. Among
those from outside countries, the most originated in United
Kingdom, which had 74 tips, followed by Canada, which had 46.
SEC Chairman Mary Schapiro called the program a "valuable
tool" in helping to ferret out financial fraud.
"When insiders provide us with high-quality road maps of
fraudulent wrongdoing, it reduces the length of time we spend
investigating and saves the agency substantial resources,"
Schapiro said in a statement.
Under the Dodd-Frank Act, the SEC can compensate
whistleblowers whose tips about possible securities law
violations lead to an SEC enforcement action with more than $1
million in monetary sanctions.
The SEC can pay the whistleblower 10 to 30 percent of the
sanctions collected. That could mean a payout of $100,000 to
$300,000 for the collection of a $1 million sanction.
In August, the SEC said it approved a reward of nearly
$50,000 for a whistleblower who turned over documents and other
information to help stop a multi-million dollar fraud, the first
award in the program.
The tipster received 30 percent of about $150,000 collected
so far, out of more than $1 million in sanctions imposed.
The U.S. government's fiscal year ended on Sept. 30.
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