This content is from: Innovation
For Tipsters, A Trip To Not-So-Bountiful
The Securities and Exchange Commission, it seems, has never been enthusiastic about a program Congress forced on it 18 years ago.
The Securities and Exchange Commission, it seems, has never been enthusiastic about a program Congress forced on it 18 years ago. Under the Insider Trading and Securities Fraud Enforcement of 1988, the SEC is expected to pay individuals a bounty for providing tips that result in a penalty imposed on those who found to have engaged in inside trading. In nearly two decades, Forbes Magazine reports, the agency has shelled out only four payments for a total of $67,570 in the program modeled after one implemented by the Internal Revenue Service. According to Forbes, the SEC program has not been a rousing success because the agency has proved successful in winning insider-trading cases without the tips, and the tipsters themselves have found it more lucrative to share their information with lawyers representing class actions. Whats more, says Forbes, the snail-pace reward process and recovery limits rewards are capped at 10% the recovered amount have not attracted a lot of takers over the years.