Temat: SEC Discourages Incentivizing Whistleblowers to Keep...

SEC Discourages Incentivizing Whistleblowers to Keep Complaints In-House

What’s good for the goose is apparently not so good for the gander, as the SEC warns in-house attorneys against whistleblower contracts.

The SEC has been financially incentivizing whistleblowers to bring securities fraud complaints to the agency’s attention for years, with increasing success. The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 empowers the SEC to reward whistleblowers who provide original information that leads to an SEC enforcement action in which more than $1 million in sanctions is ordered. In such instances, the whistleblower reward can range from 10% to 30% of the total money collected. The Act also established the SEC Office of the Whistleblower, which takes in, evaluates and, pursues whistleblower complaints.

The number of complaints to the Office of the Whistleblower has increased in recent years as large whistleblower rewards are publicized. According to the 2013 Annual Report to Congress on the Dodd-Frank Whistleblower Program (http://www.sec.gov/about/offices/owb/annual-report-201..., “[t]he number of whistleblower tips and complaints the Commission receives annually increased from 3,001 in the 2012 fiscal year to 3,238 in the 2013 fiscal year.” The 2012 number was also up from 334 tips and complaints in the last four months of 2011, when the Dodd-Frank whistleblower program began.

Source: Securities Compliance Sentinel:
http://compliancex.com/sec-discourages-incentivizing-w...