Journal of Accountancy: SEC fields 3,000 whistleblower complaints in 12 months
I chose to review an article pertaining to the success of the new whistleblower program in the SEC. This program was enacted in as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, PL 111-203. This piece of legislation was pushed through congress and approved as part of the President’s initiative to clean up Wall Street.
According to the article 3,001 tips were reported to the SEC pertaining to apparent wrong doing on Wall Street. Tips came from all 50 states and 49 countries, according to an annual report on the program for the fiscal year that ended in September 2012. The SEC Chairman Mary L. Schapiro said in a news release. “When insiders provide us with high-quality road maps of fraudulent wrongdoing, it reduces the length of time we spend investigating and saves the agency substantial resources.” The tips consisted of Allegations about corporate disclosures and financials, which represented 18.2% of submissions to the SEC, were the most common category of complaints from whistleblowers, followed closely by offering fraud (15.5%) and manipulation (15.2%). A total of 143 enforcement judgments and orders were issued during the fiscal year that may be eligible for whistleblower awards. The Dodd-Frank Act allows the SEC to pay financial awards to whistleblowers that provide information that leads to a successful SEC enforcement action with more than $1 million in sanctions. The SEC’s first award under the whistleblower program totaled nearly $50,000 and was given on August 21, 2012 to an informant whose identity remains anonymous. The whistleblower is expected to receive more if additional judgments in the case lead to more funds being collected in sanctions. Whistleblowers can receive between 10% and 30% of the sanctions collected, and awards are paid from the Investor Protection Fund established by Congress to fund payments. Although the...
References: Tysiac, K. (2012). Hot tips: SEC fields 3,000 whistleblower complaints in 12 months. N.p.: Journal of Accountancy. Retrieved November 26, 2012
Please join StudyMode to read the full document