Securities And Exchange Commission Whistleblower Program

Enforcement Director Praises The Securities And Exchange Commission Whistleblower Program

At the Annual Taxpayers Against Fraud Conference, the SEC’s Director of Enforcement gave a speech about the Securities and Exchange Commission whistleblower program. The “bottom line”, according to the Director, is that the Securities and Exchange Commission whistleblower program “has had a tremendous impact.”  He emphasized that SEC whistleblowers “provide an invaluable public service”.  The Securities and Exchange Commission whistleblower program has had a “transformative impact” in terms of detecting illegal conduct, moving SEC investigations forward, and enabling the SEC to pursue cases using fewer resources.
securities and exchange commission whistleblower program

The Enforcement Director’s speech

The Director said that when he asks the SEC enforcement staff how an investigation began, they “often respond by pointing to a whistleblower.” “My general message to whistleblowers is to report as soon as you learn of misconduct,” he said.

SEC Whistleblower Awards

According to the Director, through the end of fiscal year 2015, the SEC had issued Preliminary Determinations and Final Orders in connection with more than 390 claims for SEC whistleblower awards. As of the date of the Director’s speech, the Securities and Exchange Commission whistleblower program had paid out over $107 million in SEC whistleblower awards.

SEC Whistleblower Protections

Securities and Exchange Commission whistleblower program

           The SEC shield

The SEC whistleblower rules prohibit employers from retaliating against SEC whistleblowers or impeding them from communicating with the SEC. Discussing the SEC’s efforts to enforce SEC whistleblower protections, the Director noted that the SEC had already brought four cases against companies for impeding SEC whistleblowers’ communications with the SEC, and one for retaliating against an SEC whistleblower.

Types Of SEC Whistleblower Cases

The Director devoted a portion of his speech to types of SEC whistleblower cases.  Among the types of SEC whistleblower cases that he mentioned were:
  • Foreign Corrupt Practices Act (“FCPA”) violations,
  • issuer reporting and disclosure, and
  • offering frauds and ponzi schemes.

The Director’s Approval Of The Involvement Of SEC Whistleblower Lawyers

Securities & Exchange Commission whistleblower program

  The SEC’s main office in Washington, D.C.

The Director expressed his approval of whistleblowers hiring SEC whistleblower lawyers to represent them.  He even made a point of devoting an entire section of his speech to the role of an SEC whistleblower lawyer, and the ways in which an SEC whistleblower lawyer can be helpful to both the client and to the SEC. “One thing I get asked about a lot is how we view whistleblower counsel.  It will come as no surprise to this audience that we welcome the involvement of counsel in whistleblower tips,” he said. The Director went on to discuss many ways in which the involvement of an SEC whistleblower attorney can be helpful.  Two of the examples that he gave were:

While whistleblowers can engage us without the assistance of counsel, counsel experienced in whistleblower representations can help with up-front triage of tips to identify those that have a nexus with the federal securities laws and that may have merit.  And they can work with whistleblowers going forward to identify information that will be important to us and that will allow us to advance our investigations.

Additional Information

For more information about the Director of Enforcement’s praise for the Securities and Exchange Commission whistleblower program, click on the links below:
  • Speech by the SEC’s Director of Enforcement.  (External link to the SEC’s website.)
  • Article about the Director of Enforcement’s praise for the Securities and Exchange Commission whistleblower program.  (Note:  external link to The Pickholz Law Offices website.)

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