The Securities and Exchange Commission is paying nearly $50,000 to a whistleblower who helped prevent a multimillion-dollar securities fraud, in the first award paid under a new whistleblower program.

Sean McKessy

The award represents 30 percent of the amount collected in an SEC enforcement action against the perpetrators of the scheme, the maximum percentage payout allowed by the whistleblower law.

“The whistleblower program is already becoming a success,” said SEC Chairman Mary L. Schapiro in a statement Tuesday. “We’re seeing high-quality tips that are saving our investigators substantial time and resources.”

The award recipient, who does not wish to be identified, supplied documents and other information that enabled the SEC’s investigation to move at a quick pace and stop the fraud from ensnaring more victims. The whistleblower’s help led to a court ordering more than $1 million in sanctions, of which approximately $150,000 has been collected so far. The court is considering whether to issue a final judgment against other defendants in the scheme. Any increase in the sanctions ordered and collected will lead to additional payments to the whistleblower.

“This whistleblower provided the exact kind of information and cooperation we were hoping the whistleblower program would attract,” said SEC’s Division of Enforcement or Robert Khuzami. “Had this whistleblower not helped to uncover the full dimensions of the scheme, it is very likely that many more investors would have been victimized.”

The SEC said it did not approve a claim from a second individual who was also seeking an award in the same matter because the information provided did not lead to or significantly contribute to the SEC’s enforcement action, as required for an award.

The 2010 Dodd-Frank Act authorized the whistleblower program to reward individuals who offer high-quality original information that leads to an SEC enforcement action in which more than $1 million in sanctions is ordered. Awards can range from 10 percent to 30 percent of the money collected. The Dodd-Frank Act included enhanced anti-retaliation employment protections for whistleblowers and provisions to protect their identity. The law specifies that the SEC cannot disclose any information, including information the whistleblower provided to the SEC, which could reasonably be expected to directly or indirectly reveal a whistleblower’s identity.

Sean McKessy, chief of the SEC’s Whistleblower Office, said that since the program was established in August 2011, about eight tips a day are flowing into the SEC. “The fact that we made the first payment after just one year of operation shows that we are open for business and ready to pay people who bring us good, timely information,” he noted.

For more information about the whistleblower program and how to report a tip, visit www.sec.gov/whistleblower.