SEC Releases Whistleblower Program’s 2012 Annual Report

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On November 15, 2012, the Securities and Exchange Commission (“SEC” or the “Commission”) released its Annual Report on the Dodd-Frank Whistleblower Program (the “Report”). The Report – which was prepared by the Commission’s Office of the Whistleblower (“OWB” or the “Office”) to satisfy its annual reporting obligations under the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) and the Securities Exchange Act of 1934 – summarizes OWB’s activities during fiscal year 2012 and demonstrates an increase in enforcement activity.

The Office received 3,050 hotline phone calls from members of the public in fiscal year 2012, a sharp increase over the 650 phone calls received during the five months of the hotline’s operation in 2011. OWB received 3,001 formal whistleblower tips via submission of Form-TCR by mail, fax and online. (While the actual number of tips exceeds 3,001, the Report excludes tips received from those who neglected to submit the requisite paperwork or are otherwise ineligible to receive awards.) The tips most frequently concerned Corporate Disclosures and Financials (547 tips, 18.2%), Offering Fraud (465 tips, 15.5%) and Manipulation (457 tips, 15.2%). While the 115 complaints related to the Foreign Corrupt Practices Act amount to only 3.8% of the year’s total, that share may rise in the future, along with the increasing focus on anti-corruption enforcement.

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Topics:  Dodd-Frank, SEC, Whistleblowers

Published In: Administrative Agency Updates, Civil Remedies Updates, General Business Updates, Finance & Banking Updates, Securities Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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