SEC Pays Financial-Fraud Whistleblowers Better Than FBI

Getting ready to blow the whistle? Be careful who you hand the information to.

Whistleblowers who go to the FBI to tip them off about financial fraud "are probably going to get zero" in the way of monetary rewards, according to David Colapinto, a whistleblower lawyer quoted in The Washington Post earlier this week.

Colapinto goes on to say that whistleblowers who want to get compensated for their tip should probably talk to someone at the Securities and Exchange Commission, where, if their intel leads to a penalty of more than $1 million, tipsters can get between 10 and 30 percent of that cash for their trouble.

Certainly, plenty of people are trying to cash in. In the first seven weeks that the SEC began offering 10 cents on the dollar for actionable information, the agency reported getting 334 tips, shaking out to almost seven tips a day, or a new one every three and a half hours.

The SEC might be getting even more tips if more Americans knew the agency's reward program existed. Nearly 70 percent of Americans are unaware that the SEC has such an incentive in place, according to a recent poll from the law firm Labaton Sucharow -- despite that more than one-third of people said they know about misconduct in their own workplace, and more than three-quarters of people said they'd be willing to report it if they were compensated in some way.

Even though the FBI likely isn't paying people to tip them off, it's still pulled out other stops in an aim to boost the number of tips it receives. The agency recently put out a public service announcement featuring famed actor Michael Douglas asking Americans to forward any tips about financial crime.

Still, FBI investigators have managed to find enough financial crime work to keep them occupied. The bureau recently announced that its investigations of fraud, insider trading and Ponzi schemes last year resulted in 3,000 convictions and some $12 billion in restitution, according to the Associated Press.

In general, the financial crisis seems to have put Americans more on alert for white-collar crime -- which may be one of the reasons why businesses strenuously opposed the SEC's reward program back when it was first being considered.

And Americans' new hyper-aware attitude is showing in their level of complaints. Financial-fraud complaints to the Federal Trade Commission have jumped 62 percent since 2008, according to a recent research brief from Boston College, with 1.5 million complaints arriving in 2011 alone.

Comments

[MSROADKILL612]

06:43 AM on 03/01/2012

Bangkok - its v funny - these officious little men use shrill whistles & act like they are guiding a jet down on a carrier to get u into a parking lot e.g. - am told they even practice after hours - do not live next door to one

[sagewhistle1]

10:40 PM on 02/29/2012

David Chaves, a Supervisory Special Agent with the FBI recently was quoted as saying,
"I'd like to see people be patriotic and just do the right thing instead of being motivated by money". It is interesting to note, that inside the FBI, when their own whistleblowers "did the right thing" they were blacklisted, retaliated against, suffered reprisals, and lost their distinguished careers. Don't believe the FBI would do such a thing ? Look up these FBI whistleblowers:
Fred Whitehurst
Theresa Foley
Sibel Edmonds
John Roberts
Jane Turner
Robert Wright
Bassem Youssef
Mike German
Coleen Rowley
and others.
Shame on Director Mueller and his senior management team for treating their own whistleblowers with such disdain and contempt, and ruining the careers of such honorable employees.

[StopMakingSense2]

04:48 PM on 02/29/2012

Best place to blow the whistle is at dog training school since if you rat out the plutocrats ripping off the system they will get even with you!