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Untimely reporting reduces whistleblower's award

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The U.S. Securities and Exchange Commission said Wednesday it is awarding more than $325,000 to the former employee of an investment firm, but the award could have been higher had the whistleblower not hesitated to make his report.

The SEC said the former employee had tipped off the agency with specific information that enabled its enforcement staff to open an investigation and uncover the extent of the fraudulent activity. The SEC does not identify its whistleblowers by name.

It said the whistleblower provided a detailed description of the misconduct, and the individuals involved, but waited to come forward until after he left the firm.

“Corporate insiders who become aware of securities law violations are encouraged to come forward without delay in order to prevent misconduct from continuing unabated while investors suffer more harm,” said Andrew Ceresney, director of the SEC's Division of Enforcement, in a statement.

“Whistleblowers are afforded significant incentives and protections under the Dodd-Frank Act and the SEC's whistleblower program so they can feel secure about doing the right thing and immediately reporting an ongoing fraud rather than letting time pass.”

In July, the SEC awarded more than $3 million to a whistleblower, the third-highest award to date under its 4-year-old whistleblower program.

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