Whistleblower Tips Blowing Up
Since its inception in 2011, the SEC has received over 14,000 tips from individuals in all 50 states and 95 foreign countries, and has awarded over $142 million for tips that led to successful enforcement actions.
Congress established the whistleblower program to incentivize whistleblowers with specific, timely and credible information about federal securities laws violations to report to the SEC. Awards are required to be made in an amount equal to 10% of 30% of the monetary sanctions collected. The SEC established OWB, a separate office within the SEC’s Division of Enforcement, to administer and effectuate the whistleblower program. In addition to establishing the awards program, the SEC implemented regulations that prohibit retaliation against whistleblowers who report possible wrongdoing based on a reasonable belief that a possible securities violation has occurred, is in progress or is about to occur.
Enforcement actions from whistleblower tips have resulted in more than $935 million in financial remedies.
The ten highest awards issued by the SEC to whistleblowers have each totaled more than $1 million, with the largest exceeding $30 million. Six of the ten highest whistleblower awards were made in 2016. In 2016, the SEC received over 4,200 tips, which represents a more than 40% increase in whistleblower tips since 2012.
Almost 65% of the whistleblowers were insiders of the entity on which they reported information of wrongdoing to the SEC.
In 2016, the most common complaint categories reported by whistleblowers were corporate disclosures and financials (22%), offering fraud (14%) and manipulation (11%). In 2016, California, New York, Florida, Ohio and Texas yielded the highest number of whistleblower tips.
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Author Bio
Leila Shaver is the Founder of My RIA Lawyer, a law firm that provides compliance and legal consulting for financial institutions. With extensive experience as a securities attorney and compliance expert, she has served as Chief Compliance Officer and General Counsel to RIAs, BDs, and TAMPs with billions in assets under management.
Leila understands the challenges RIAs face and is committed to helping RIAs streamline their processes, mitigate risks, and ensure compliance with regulatory requirements. She received her Juris Doctor from Atlanta’s John Marshall Law School and is a West Georgia Young Lawyers’ Association member. Leila has received numerous accolades for her work, including the Carroll County Bar Association’s Outstanding Young Lawyer Award in 2017.
