Pay plan for fraud tipsters

US regulators were today looking at plans to pay huge rewards to whistleblowers in cases of financial wrongdoing in the wake of the Bernard Madoff fraud scandal.

"We have sought legislation to enable us to compensate whistleblowers for providing substantial evidence of wrongdoing," said Mary Schapiro, chairman of the US Securities and Exchange Commission.

Gaping discrepancies in whistleblowing rules mean that just $150,000 (£91,773) has been paid out in the past few years for tips on insider trading, while tipsters on wrongdoing by drug companies reap rewards of more than $250 million a year.