SEC Whistleblower Program Stricter Than IRS Bounty Which Paid $104 Million To Felon, Former Official Says

Reuters
September 12, 2012


Jordan A. Thomas discusses the differences between the SEC and the IRS' whistleblower programs


Thomas noted differences between the programs for rewarding individuals, even if they participated in the wrongdoing, who provide information that leads to the recovery of unpaid taxes and penalties, in the case of IRS tips, or fines and the disgorgement of ill-gotten gains, in the case of SEC whistleblowers.

The SEC program allows for bounties of 10 percent to 30 percent of the amount recovered; the IRS range is 15 percent to 30 percent. The SEC program applies to recoveries that stem from the whistleblower's information, not just from the entity or individual named in the initial complaint, Thomas said.

The SEC program, however, only applies if the recovery ordered is $1 million or more. The information must have been provided voluntarily, and individuals are excluded from participation in the program if they were convicted of violating related U.S. laws, Thomas added.

"It would depend on where the individual was convicted. Overseas would have no impact, but in the U.S. it would zero [the whistleblower] out," Thomas said