Dodd-Frank added Exchange Act Section
21F(g)(5) and requires that SEC's Office of the Whistleblower to report to Congress
annually on the whistleblower program. It's due each October 30. I'm sure the
SEC wanted to be in compliance, so they released the first annual report on the
Whistleblower program (.pdf).
Section 922 of the Dodd-Frank Wall Street Reform and
Consumer Protection Act added Section 21F to the Exchange Act and directs the
Commission to make monetary awards to eligible individuals who voluntarily
provide original information that leads to successful SEC enforcement actions
resulting in monetary sanctions over $1,000,000. Awards are required to be made
in the amount of 10% to 30% of the monetary sanctions collected and be paid
from the SEC's Investor Protection Fund.
However, the final whistleblower rules became effective
on August 12, leaving only 7 weeks of data under the new program for this
report, running to September 30.
Vanessa Schoenthaler notes that "during
the seven weeks for which data is available, the Commission received 334
whistleblower tips. Among these, the most common complaints related to market
manipulation (54), offering fraud (52) and corporate disclosures and financial
statements (51). These tips were categorized by the whistleblowers themselves,
not the Commission, and there are 84 that were submitted under the category of
"other" or without a category at all, so it's hard to say how accurate this
information really is."
The whistleblower was able to designate a location, with
37 states and 11 foreign countries in the mix. Although, almost 1/4 left the
location blank. The most popular: China, California, Florida, Maryland, New
York, and Texas.
The seven weeks of data shows over 20 tips per week
coming in on Form TCR.
What will be more interesting is how many of this filings turn into meaningful
investigations and how many are unfounded claims from disgruntled employees
trying to get back at their company.
additional commentary on developments in compliance and ethics, visit Compliance Building,
a blog hosted by Doug Cornelius.
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