On August 21, 2012, the Securities and Exchange Commission (SEC) announced that it has awarded its first whistleblower bounty, just over one year after the SEC’s Dodd-Frank whistleblower rules became effective. The SEC’s Claims Review Staff issued a short order, Release No. 34-67698, granting the whistleblower’s award, which notes that the SEC declined to award a claim to a second whistleblower involved in the action.

The SEC stated that the information provided by the whistleblower ultimately resulted in a court ordering over $1 million in sanctions, and the whistleblower will receive the maximum award of 30% of the monetary sanctions collected in the action. Since the SEC has only collected $150,000 of the total sanctions thus far, the whistleblower will receive approximately $50,000 initially, but the whistleblower’s award will increase as the SEC continues to collect sanctions.

Companies should review their policies and stress the importance of internal reporting of suspected fraud without retaliation.