For whistleblowers, the SEC money's not enough

Eric Schneiderman
Louis Lanzano | Bloomberg | Getty Images
Eric Schneiderman

When it comes to turning in bad guys in banking, it's not all about the money.

Wall Street whistleblowers, in fact, more often turn to New York Attorney General Eric Schneiderman and his band of financial cops when reporting wrongdoing than they do the Securities and Exchange Commission, according to a Bloomberg report.

There's seemingly one big difference between the two: The SEC has been handing out some huge cash payouts for information that leads to action, while the state AG's office does not except in instances where public funds are involved.

In fact, the SEC in September offered its biggest payment yet—a more than $30 million bounty to someone who provided information that led to an undisclosed successful enforcement action.

The SEC actually has an Office of the Whistleblower that oversees the awards program, which gives money for cases that result in more than $1 million in sanctions. In August, one lucky winner collected $300,000.

Read MoreSEC awards $30M payout, largest whistleblower award

Apparently, there's another big difference that separates Schneiderman's office from the SEC: Efficiency. Whistleblowers are finding that the attorney general's office delivers action more often than the SEC. The Bloomberg report cites several instances where high-profile cases, such as the lawsuit filed against Barclays in June, were brought to the SEC first but the agency was slow to react.

On the SEC's behalf, a spokesman told Bloomberg that the agency is proud of its record on such cases. Schneiderman's office wouldn't be brought into the fray either: A spokesman said the SEC has done "outstanding work" on whistleblower cases.

Still, the SEC may be noticing the trend.

Justice Department officials recently made several speeches calling for greater incentives for those who report wrongdoing, with outgoing Attorney General Eric Holder pushing for even greater cash rewards.

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