Then, upon retirement, the investors had the right to take 6 percent (or 5 percent, depending on the product) of the cap for as long as they wanted or until it ran out of money, and still be able, at some point, to annuitize it. It is complicated, but the point is that thanks to the guarantee, the money was never supposed to run out. That is what the prospectus said, and it is what those in the sales force, made up of people like Lloyd, were taught to sell to customers. It wasn’t long before investors had put $2.5 billion into the products.

The following July, Lloyd — and a handful of others in the sales force — discovered, to their horror, that the guarantee didn’t work as advertised. In fact, because of the market’s fall, it was a near-certainty that thousands of customers were going to run through the income stream within seven or eight years of withdrawing money.

Lloyd did not immediately run to the S.E.C. Rather, he dug in at MassMutual and, as the S.E.C. press release put it, did “everything feasible to correct the issue internally.” For a while, he thought he was going to have success, but, at a certain point, someone stole the files he had put together on the matter and turned them over to the Financial Industry Regulatory Authority, which is the industry’s self-regulatory body. It was only when the regulatory authority failed to act that his lawyer told him about the whistle-blower provisions in Dodd-Frank and he went to the S.E.C., which began its own investigation.

The Dodd-Frank law has provisions intended to protect whistle-blowers from retaliation, but there are certain aspects of being a whistle-blower that it can’t do anything about. “People started treating me like a leper,” recalls Lloyd. “They would see me coming and turn around and walk in the other direction.” Convinced that the company was laying the groundwork to fire him, he quit in April 2011, a move that cost him both clients and money. (Lloyd has since found employment with another financial institution. For its part, MassMutual says only that “we are pleased to have resolved this matter with the S.E.C.”)

In November 2012, MassMutual agreed to pay a $1.6 million fine; Lloyd’s $400,000 award is 25 percent of that. It was a slap on the wrist, but more important, the company agreed to lift the cap. This will cost MassMutual a lot more, but it will protect the investors who put their money — and their retirement hopes — on MassMutual’s guarantees. Thanks to Lloyd, the company has fixed the defect without a single investor losing a penny.