On August 18 a compliance officer at Interactive Brokers LLC in Chicago called the Securities and Exchange Commission to report that two men in Spain had been trading suspiciously in the stock of a company that had jumped 27 percent the day before. The compliance officer suspected insider trading.
Two days later, the SEC filed an emergency complaint in federal district court in Chicago. It accused the two men of having inside knowledge of a takeover attempt that caused the company’s stock to jump, and it sought to freeze their over $1 million in profits. The case is believed to be the first public legal action to fall under the latest financial reforms, called the Dodd-Frank Wall Street Reform and Consumer Protection Act. And it means that the compliance officer might be entitled to a sizable reward under the act’s controversial whistle-blower provisions.
