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The SEC Has Never Paid a Whistleblower This Much Before

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"Deception had become an accepted business practice."

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Call them snitches or good citizens: whistleblowers can face a tough decision when deciding to go public with the private misdeeds of a colleague or employer.

So Uncle Sam is trying to make that decision easier with a surefire incentive: cash.

Image via Shutterstock Photo credit: Shutterstock

The U.S. Securities and Exchange Commission paid more than $30 million to an unidentified tipster — more than twice as much as its ever paid out before — the Wall Street Journal reported.

One of the few pieces of information released about the whistleblower: The person is foreign and not an American.

From the Journal:

The award came less than a week after Attorney General Eric Holder gave a New York speech in which he said he wanted to boost payouts to motivate more tipsters under a separate whistleblower initiative. The SEC program has been in place since 2011 but the awards had been relatively modest this year.

The SEC didn't identify the tipster, where he or she is from or the case this award was tied to. Andrew Ceresney, director of the SEC's enforcement division, said in a statement that "this whistleblower came to us with information about an ongoing fraud that would have been very difficult to detect."

The $30 million to $35 million award could have been even bigger if the tipster had acted faster, according to the heavily redacted SEC order making the award. The agency reduced the award because the tipster delayed reporting the misconduct after first learning of it, according to the order, which also blanks out the length of the delay.

The SEC's whistleblower payment program is a product of the 2010 Dodd-Frank financial regulation legislation, the Journal noted, and of the 14 people to have received awards so far, four have been foreigners.

The mystery whistleblower collecting the record $30 million award released a statement through Washington law firm Phillips & Cohen LLP, which claims to represent the tipster.

"I was very concerned that investors were being cheated out of millions of dollars and that the company was misleading them about its actions," the statement read. "Deception had become an accepted business practice."

Follow Zach Noble (@thezachnoble) on Twitter

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