SEC Inspector General Kotz's June 30th letter to Chairman Kanjorski suggesting bounties:
"Bounty programs are an effective tool to encourage whistleblowers to come forward and would provide necessary incentives for outside entities to bring complaints about possible illegal activity. There is some evidence that the bounty program implemented by the Department of Justice (DOJ) has played a role in the increase of civil recoveries obtained by the DOJ over a 10-year period. The Internal Revenue Service (IRS) also has a system in place where it provides a bounty to individuals who present the IRS with information leading to the collection of federal taxes.
Although the bounty system has been in place at the SEC for more than 20 years, there have been relatively few awards made. The SEC program is limited to insider trading cases, and the stated criteria for judging bounty applications are broad, somewhat vague and not subject to judicial review.
Currently, Section 21A(e) of the Securities Exchange Act of 1934 (Exchange Act) [15 U.S.C. 78u-l(e)] authorizes the SEC to award a bounty to a person who provides information leading to the recovery of a civil penalty from an insider trader, from a person who "tipped" information to an insider trader, or from a person who directly or indirectly controlled an insider trader. All bounty determinations, including whether, to whom, or in what amount to make payments, are within the sole discretion of the SEC, however, the total bounty may not currently exceed 10% of the amount "actually recovered" from a civil penalty pursuant to a court order."
Harry Markopolos, who exposed Madoff, must be counting the money he missed!