In her testimony yesterday before the House Subcommittee on Financial Services, SEC Chairman Mary Schapiro told Congress that for the first time, the SEC is considering offering cash bounties to private sector whistleblowers who help expose financial wrongdoing. The SEC’s current “bounty” program applies only to insider trading cases, not financial fraud.
“Right now, the main reward for being a [financial fraud] whistleblower is the good feeling you get of having done something important, because we don’t have the authority to pay,” she said. Schapiro stated that the SEC might be able to return to Congress within a month with a more specific proposal for a new incentive structure to encourage such tips.
