By Sarah N. Lynch WASHINGTON (Reuters) - An anonymous tipster living abroad will be receiving more than $30 million, in the largest whistleblower award ever doled out by U.S. securities regulators as part of a program that aims to incentivize insiders to report wrongdoing.
The Securities and Exchange Commission said on Monday that the whistleblower provided crucial information that helped investigators uncover a "difficult to detect" ongoing fraud.
"This record-breaking award sends a strong message about our commitment to whistleblowers and the value they bring to law enforcement," SEC Enforcement Director Andrew Ceresney said.
The SEC won new powers in the 2010 Dodd-Frank Wall Street reform law to entice whistleblowers with monetary awards. Prior to the new law, the SEC was only able to reward people for helping on insider-trading cases.
The new program lets the SEC pay a whistleblower who provides tips and original information that leads to an enforcement action with sanctions that exceed $1 million.
The SEC can award a whistleblower anywhere between 10 percent and 30 percent of the money the agency collects.
By law, the SEC is not allowed to reveal the identity of whistleblowers, and so as a result it does not disclose which case a whistleblower helped to crack.
Settlements with the SEC large enough to justify a $30 million-plus award are fairly uncommon.
Phillips & Cohen LLP, a law firm that represented the whistleblower, declined to provide details about the case but said its client will receive at least $30 million and possibly as much as $35 million.
"I was very concerned that investors were being cheated out of millions of dollars and that the company was misleading them about its actions," said the whistleblower, in a press release issued by the law firm.
Monday's announcement marks the fourth time the SEC has agreed to award a whistleblower living abroad - a fact that the agency said demonstrates the "international breadth" of the program.
Since the inception of the program in fiscal year 2012, the SEC has awarded more than a dozen whistleblowers. Monday's $30 million-plus award is more than double the previous record of $14 million, awarded to a whistleblower in 2013.
(Reporting by Sarah N. Lynch; Editing by Steve Orlofsky)