SEC Whistleblower Program Records Best Year

Corporate Crime Reporter
November 22, 2016

Jordan A. Thomas reflects on the SEC’s Whistleblower Program’s success in 2016 and what effect the incoming administration may have

When asked what impact the incoming Trump administration would have on the program, Labaton Sucharow partner Jordan Thomas said that any efforts to undermine the program "are likely to be unsuccessful and opposed by a broad coalition of law enforcement, regulatory and community organizations."

"The program has been responsible for a quiet revolution in securities enforcement," Thomas said. "Reasonable people can disagree about regulations, but low-cost and effective enforcement of the securities laws has always been a bipartisan goal."

"Overall, tips rose by eight percent, which is the same percentage increase we saw from 2014 to 2015," Thomas said. "Generally, I believe that growth of the program will continue at this rate."

"Foreign Corrupt Practices Act violations reporting is also way up from 186 last year to 238 this year – a 27.9 percent jump," Thomas said.

"Forty percent of whistleblowers received an award for reporting information that significantly contributed to an ongoing investigation. Prior to Dodd-Frank, these sort of tips and assistance were rarely received – and demonstrate the game-changing nature of whistleblowers to the SEC enforcement program."

"Thirty-five percent of award recipients were outsiders to the company that they reported on.  Again, these sort of tips were exceedingly rare prior to Dodd-Frank."

"About 80 percent of award recipients reported their concerns internally," Thomas said. "A significant concern of Corporate America is that the SEC Whistleblower Program would undermine internally reporting. This statistic suggests that this has proven to be unfounded."