The U.S. Securities and Exchange Commission (SEC) is paying out nearly US$50,000 to a whistleblower — the first payout from a new program to reward people who provide evidence of securities fraud.

The SEC reports that the award represents 30% of the amount collected in an SEC enforcement action (which is the maximum allowed) against the perpetrators of a multi-million dollar fraud. The regulator says that the whistleblower’s assistance led to a court ordering more than $1 million in sanctions, of which approximately $150,000 has been collected so far. Any increase in the sanctions ordered and collected will increase payments to the whistleblower, it notes.

The award recipient, who does not wish to be identified, provided documents and other significant information that allowed the SEC’s investigation to move at an accelerated pace and prevent the fraud from ensnaring additional victims, the SEC reports.

“This whistleblower provided the exact kind of information and cooperation we were hoping the whistleblower program would attract,” said Robert Khuzami, director of the SEC’s division of enforcement. “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 did not approve a claim from a second individual seeking an award in this matter because the information provided did not lead to or significantly contribute to the SEC’s enforcement action, it noted.

The new whistleblower program was created as part of the US regulatory reform known as Dodd-Frank. It aims 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% to 30% of the money collected.

The Ontario Securities Commission (OSC) has suggested that it may consider establishing a similar program in Ontario. But, to date, it has not proposed anything.

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 said.