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Insider Trading
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SEC Law: Insider Trading

Can I receive a bounty for providing information about someone who has committed insider trading?
Yes. Under Section 21A(e) of the Securities Exchange Act, the SEC may award a bounty to any person who provides information leading to a civil penalty in a case of insider trading and/or tipping. The total amount of the bounty award paid from a civil penalty cannot exceed 10% of that penalty. In July 2010, for example, the SEC announced its award of $1 million to a couple in Connecticut who provided vital information to the SEC in its investigation of insider trading at Pequot Capital Management.

The Dodd-Frank Wall Street Reform and Consumer Protection Act expands the opportunities and amounts for bounties. Among the law's many provisions, it creates a program that lets the SEC pay an award to eligible whistleblowers who voluntarily provide the SEC with original information about a violation of the federal securities laws, such as insider trading. For the bounty to be issued, this information must lead to the successful enforcement of covered judicial or administrative actions. See the website of the SEC for more details, related regulations, and the online submission form.

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