Today, we offer our “Friday List,” an occasional feature summarizing a topic significant to investment management professionals interested in regulatory issues. Our Friday Lists are an expanded “Our Take” on a particular subject, offering our unique (and sometimes controversial) perspective on an industry topic.
The SEC recently announced that it has now ordered more than $1 Billion in financial penalties based on tips from whistleblowers. Also, the Supreme Court is currently deciding the definition of a “whistleblower.” We felt it a good time to offer 10 significant facts about the SEC’s Whistleblower program, which was created in 2012 as part of the Dodd Frank-Act.
10 Important Facts about the SEC Whistleblower Program
- The SEC has awarded more than $175 Million to 49 whistleblowers.
- The largest whistleblower award to date is $30 Million.
- A whistleblower is entitled to 10%-30% of monetary sanctions if the sanctions imposed exceed $1 Million.
- Both an outsider and a former employee can be a whistleblower.
- Covered firms may not take retaliatory job action against a whistleblower.
- Employee separation and non-compete agreements may not limit an employee’s whistleblower rights.
- Directors can be liable for whistleblower retaliation.
- Unless the Supreme Court decides otherwise, internal reporting, is sufficient, but not required, to become a protected whistleblower.
- In-house counsel and compliance officers are entitled to whistleblower protections.
- Firms must adopt whistleblower procedures.