Whistleblower Law Blog
SEC Whistleblower Chief Reportedly Pleased With High-Quality Leads Received Since Beginning of Whistleblower Rewards Program
According to a report this week in the Financial Times, the chief of the Securities Exchange Commission’s new Whistleblower Office, Sean McKessey, stated that the SEC has “received notes, audio recordings of conversations and simple recollections” of securities fraud and other wrongdoing since a new whistleblower reward program promising rewards for whistleblowers began last year.
The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 requires that the SEC pay rewards to whistleblowers who voluntarily provide the SEC with original information that leads to successful enforcement actions. Under the new law, whistleblowers who report fraud can qualify to receive 10 to 30% of the amount that the SEC recovers through lawsuits and settlements.
McKessey noted that his office has “been very pleased with the percentage of whistleblowers tips that have [signs] of reliability either because they’re from somebody working at the company they’re complaining about or there’s a sufficient amount of specificity, or both.”
McKessey also clarified that his office accepts both electronic and paper tip submissions and, while the SEC receives a greater amount of tips electronically, in at least one case, McKessey found a paper submission to be “extraordinarily specific and credible.” One such whistleblower tip reportedly formed the basis for the SEC opening a case last week.
The Employment Law Group® law firm is a leader in the field of whistleblower law and recently published a guide on the SEC’s new rules for the Dodd-Frank whistleblower program.