On Wednesday September 28, 2016, the SEC announced Jane Norberg as the new chief of the SEC’s Office of the Whistleblower. Ms. Norberg said: “It has been an honor serving in the roles of deputy and acting chief and working with staff extremely dedicated to the mission.” She further “remain[s] committed to making whistleblowers feel welcome and protected in reporting to the Commission.”
Earlier this year the SEC announced that it had it issued more than $100 million to whistleblowers under the agency’s whistleblower program. At that time, Mary Jo White, Chair of the SEC, stated that “The SEC’s whistleblower program has proven to be a game changer for the agency in its short time of existence, providing a source of valuable information to the SEC to further its mission of protecting investors while providing whistleblowers with protections and financial rewards.” Andrew Ceresny, Director of the SEC Division of Enforcement, added that “The SEC whistleblower program has had a transformative impact on the agency, enabling us to bring high quality enforcement cases quicker using fewer resources,” and “the ultimate goal of our whistleblower program is to deter securities violations and paying more than $100 million in whistleblower awards demonstrates the value that whistleblowers have added to our enforcement program.”
The statistics support their statements: more than 14,000 whistleblower tips received, at a rate that has increased each year; more than 30 whistleblowers receiving awards, with the largest award being more than $30 million; and successful enforcement actions resulting in more than $500 million in sanctions, including more than $346 million in disgorgement and interest.
Under the SEC’s Whistleblower Program, eligible whistleblowers may receive awards ranging from 10 to 30 percent of the amount the SEC collects in a successful enforcement action, providing those collections exceed $1 million. As we previously reported in our alert SEC Touts Continued Uptick in Whistleblower Tips, the former Chief of the Office of the Whistleblower, Sean McKessey, noted earlier this year “a significant uptick” in the number of tips submitted under the program and attributed that rise to increased public awareness and the significant financial awards available to eligible whistleblowers.
Given the SEC’s continued efforts to publicize its whistleblower program and the substantial awards that are potentially available to whistleblowers, companies should continue ensure that they have vigorous compliance programs in place to prevent and detect potential securities violations and to respond immediately in order to mitigate penalties that may result from any violations. In addition, in light of the SEC’s recent focus on companies whose confidentiality requirements may be considered to impede potential whistleblowers, companies should also review their codes of conduct, employment policies, severance agreements, and any other documents containing confidentiality requirements or releases to ensure compliance with SEC rules.