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Whistleblowers could receive greater pay-offs under new financial rules

The introduction of the Dodd-Frank act could mean that whistleblowers will receive higher financial awards if a tip-off leads to a conviction, a US legal firm has claimed.

According to Curran Tomko Tarski, the increase of funds in exchange for information on violations may see a greater number of whistleblowers stepping forward.

Individuals who provide information which leads to monetary sanctions of more than $1 million could receive up to 30 per cent of the total amount from the Securities and Exchange Commission (SEC) as a reward.

The legal business also stated that there are other parts of the US bill of financial reform which could lead to the SEC expanding their information gathering powers.

Ed Tomko, head of the White Collar Crime practice at Curran Tomko Tarski, said: "The SEC now has greater ability to extract information from employees of corporations and others involved with those employees.”

The comment follows a $1 million payment made to Karen and Glen Kaiser by the SEC in relation to an insider trading case.

Documents provided by the pair enabled the SEC to create a case against Arthur J Samberg, former chief executive of Pequot Capital Management, which resulted in him paying a fine of $28 million.

By Jim Ottewill