In SEC Inspector General H. David Kotz’s July 1, 2009 letter to Congressman Paul E. Kanjorski previewing his office’s recommendations for modifying the federal securities laws based on its ongoing investigation into the SEC’s efforts in the Madoff case, Kotz suggests expanding the SEC’s bounty program. Specifically, Kotz recommends that Congress authorize bounties for information leading to the recovery of a civil penalty from any violator of the federal securities laws.
As Kotz acknowledges in his letter, however, a bounty program is already in place at the SEC for insider trading cases, and it has been all-but-ignored and unused for its 20+ year history. Full details on this “low mileage” insider trading bounty program with just $67,570 in payments to date are available in this post on my Enforcement Action blog over at Compliance Week.
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