The U.S. Securities Exchange Commission (SEC) has continued to prove that it will support the whistleblower bounty program. Since the program’s creation in 2011, the agency’s Office of the Whistleblower has awarded more than $50 million to whistleblowers and continues to protect individuals who come forward to report fraudulent activity.
SEC Chair Mary Jo White recently referred to the SEC as the “whistleblower’s advocate.” White continued by stating that the thousands of whistleblower tips the SEC has received have helped the agency quickly detect and halt fraud. She stated that in the four years since the Office of the Whistleblower was created, companies have come to understand that wrongdoings should be self-reported to the SEC, or the company runs the risk of having an employee report it on behalf of the company.
The SEC’s goal to continue to support and protect individuals who come forward has been made evident in whistleblower cases to date. In its first retaliation case, the SEC awarded $600,000 to a whistleblower who reported improper principal transactions occurring at Paradigm Capital Management, Inc. and was subsequently demoted from his position as head trader for the company. The SEC has also made it a priority to take action against companies who work to prevent or suppress whistleblower activity. Further, White believes that employers have a responsibility to ensure all employees know it is acceptable to speak with the SEC about fraud or other violations.
Additionally, White recently reinforced that the SEC believes a whistleblower who reports a wrongdoing to his or her employer but not to the SEC is still protected under the law. Two separate cases were heard in June, in which employees only filed complaints with their employers, were subsequently terminated, and then reported the misconduct to the SEC.
The SEC’s demonstrated support of whistleblowers both empowers individuals to report misconduct, and places a responsibility on employers to create a safe environment for whistleblowers to come forward.
If you would like more information on what the SEC’s comments mean for you, consult Steve Kardell at Whistleblower Law for Managers today.