Articles Posted in SEC Whistleblower

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seclogo.bmpThe U.S. Securities and Exchange Commission recently issued its 2014 Annual Report to Congress on the Dodd-Frank Whistleblower Program. (Available at: http://www.sec.gov/about/offices/owb/annual-report-2014.pdf). According to the report, the Commission authorized an award of more than $30 million to a whistleblower, its largest to date. The Commission paid awards to nine whistleblowers in 2014, and since its inception, in 2011, it has authorized awards to a total of fourteen whistleblowers.

The SEC opened a separate office (the Office of the Whistleblower) within the Division of Enforcement to administer the Dodd-Frank Whistleblower Program. Its mission is to identify and fight fraud early and quickly to minimize losses to investors. The program requires OWB to report annually to Congress on its activities, and to specifically address how much money has been paid to whistleblowers during the preceding year. To increase awareness and the transparency of its program, OWB created a website where all Final Orders issued by the Commission either awarding or denying a claim for an award are posted. (http://www.sec.gov/about/offices/owb/owb-final-orders.shtml).
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seclogo.bmpCongress established the SEC whistleblower program through the 2010 Dodd-Frank Act, pursuant to which tipsters can receive between 10% and 30% of any amounts collected by the SEC as a result of the whistleblower’s information. Since the whistleblower program’s passage, the SEC has strongly encouraged international whistleblowers to come forward with information about fraud in the United States securities markets, and exercised its authority to substantially reward international whistleblowers for doing so.

According to SEC fiscal year-end reports, overseas whistleblowers account for approximately 12 percent of its tips. Indeed, since the beginning of the whistleblower program, the SEC has received whistleblower tips from individuals in 83 countries outside the United States. In Fiscal Year 2014 alone, the Commission received whistleblower submissions from individuals in 60 foreign countries. As depicted in the following chart, the SEC received the highest number of international whistleblower tips in Fiscal Year 2014 from individuals in the United Kingdom, India, Canada, the People’s Republic of China, and Australia.
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US Capitol Building.jpgIn November, the Securities & Exchange Commission (“SEC”) released its second “Annual Report on the Dodd-Frank Whistleblower Program” (“Whistleblower Report”), the first full-year report of its kind, announcing the achievements of the SEC and its Office of the Whistleblower in enforcing the Whistleblower Program created by the 2010 enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”). The most notable information coming out of the report, the sheer volume of formal whistleblower complaints that were filed and the complexity of the fraud reported by whistleblowers, highlights the significant impact of the new law and the importance of streamlining the burden on the SEC when coming forward with information about securities fraud.
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Whistle.jpgWelcome to the Whistleblower Legal Update, a forum for thoughts, analysis, and ideas on the pressing issues facing whistleblowers today. With the advent of the SEC Whistleblower Program just over a year ago, and the recent resurgence of the IRS Whistleblower Program, the climate for reporting fraud on the Government by concerned and engaged citizens has never been more lively. For whistleblowers, the incentives are greater, the protections are stronger, their potential impact is much deeper, and the stigma for blowing the whistle has all but disappeared. For attorneys, we now have substantially more opportunities to protect whistleblowers, and face increasingly challenging legal issues in our role as facilitators of the laws that requires us to ensure that they work correctly and effectively.

This blog will serve as a forum for attorneys from the Stone & Magnanini LLP law firm to both share their views on current issues facing whistleblowers and informally educate people about the many challenges facing individuals that are contemplating blowing the whistle on fraud. From significant decisions and changes in the statutory regime to new actions and substantial victories for whistleblowers, we will endeavor to cover the evolving whistleblower landscape in a responsive and thought provoking manner that we hope will keep regular citizens abreast of the current issues involving corporate fraud and the legal community engaged in the broader objective of making things better. The Whistleblower Legal Update is not intended to be a source of legal advice for any purpose, but rather contains general information and the opinions of the authors in a blog-style format. Potential whistleblowers are strongly encouraged to seek experienced counsel to assist them in navigating the legal web of the various statutory procedures and should not rely upon the contents of this blog.
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