SEC now freer to hike whistleblower awards

Tuesday - 7/27/2010, 11:42am EDT

With powerful senators watching closely, federal investigators search high and low for evidence of insider trading in shares of Microsoft. One of Wall Street's best-known hedge fund managers is targeted, but the feds can't find proof. Years pass, and they close the case without filing charges. Then a nasty, and apparently unrelated, divorce and child-custody battle ensues in Connecticut. A woman discovers on a family hard drive evidence that potentially implicates her ex-husband and the hedge fund in the insider trading scandal. She turns it over to investigators, who use it to shut down the fund and assess tens of millions of dollars in penalties. And then they pay $1 million to the woman for ratting on her ex. It sounds like a tale spun in Hollywood, but it's the real-life story behind a recent Securities and Exchange Commission case, which could hint at the course of future investigations as the agency capitalizes on brand-new powers to financially reward whistleblowers, the Washington Post reports.

These stories are part of our daily Dorobek Must Reads. Check out the full list of stories.