Is the SEC Relying Less on Businesses’ Self-Policing?
A notable increase in the number of whistleblower awards the U.S. Securities and Exchange Commission (SEC) has given out this year has led many legal analysts to conclude that the agency is no longer leaning on companies to self-report potential wrongdoing.
In June alone, the agency granted more than $17 million to a single whistleblower, the second-largest award it has offered since its whistleblower program began in 2011 as part of the Dodd-Frank Act. This came after a busy May for the SEC, in which it provided nearly $10 million in awards to four different individuals.
According to a statement from SEC Office of the Whistleblower Chief Sean McKessy, the increases are a result of high-quality tips provided to the agency and greater public awareness of the whistleblower program overall.
A noted change in the SEC’s approach
However, some legal scholars point out that these increases have coincided with another trend — the fact that the SEC may be relying less on organizations’ self-policing and more on the disclosures of employees, who are now more incentivized to go straight to the SEC instead of first filing an internal complaint.
Seeing these trends, it’s advisable for corporate leaders to create a culture in which employees feel more comfortable going to their supervisors with their reports. One of the employees’ most pressing concerns is potential retaliation, so management should make it clear that individuals will not face consequences after serving as internal whistleblowers.
To learn more about this important issue for today’s businesses and organizations, consult a knowledgeable and experienced Dallas attorney at Whistleblower Law for Managers today.