Regulatory: Companies should take action on employee tips in light of the SEC whistleblower program

Reporting internally first benefits both whistleblowers and companies

The Dodd-Frank Wall Street Reform and Consumer Protection Act, enacted by Congress in 2010, brought significant changes to financial regulation in the U.S. Among these changes was the establishment of the Office of the Whistleblower within the Securities and Exchange Commission (SEC). The Office of the Whistleblower is responsible for, among other things, administering a bounty program that permits individual whistleblowers who meet certain requirements to receive awards for information they submit to the SEC regarding securities law violations.

During its first year, the Office of the Whistleblower received more than 3,000 tips, complaints and referrals (TCRs) from whistleblowers in all 50 states, the District of Columbia, Puerto Rico and 49 countries outside the U.S. More than one-third of the TCRs reported by whistleblowers related to issuer disclosures, with almost 20 percent categorized as corporate disclosures and financials and more than 15 percent categorized as offering fraud.

Contributing Author

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Mary P. Hansen

Mary Hansen is a partner on the Drinker Biddle's White Collar Criminal Defense & Corporate Investigations team, where she focuses her practice on defending clients...

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Contributing Author

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William L. Carr

William L. Carr is a member of the Commercial Litigation Practice Group at Drinker Biddle. He focuses his practice on Securities and Exchange Commission (SEC)...

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