On November 15, 2017, the SEC’s Office of the Whistleblower issued its Fiscal Year 2017 annual report. The report highlights an increase in the number of whistleblower tips the Office of the Whistleblower received over Fiscal Year 2016 to more than 4,400 individual tips in Fiscal Year 2017. The report also highlighted the Office of the Whistleblower’s focus on the following areas:
- Employers’ usage of confidentiality, severance, and other kinds of agreements that may interfere with individuals’ ability to report potential wrongdoing directly to the SEC;
- An ongoing commitment to initiating enforcement actions, where appropriate, against employers who violate the anti-retaliation provisions of the Dodd-Frank Act, even in situations where the alleged whistleblower only reported possible securities laws violations internally, rather than externally, to the SEC; and
- An ongoing commitment to raising public awareness of the SEC’s whistleblower program and the activities of the Office of the Whistleblower.
The report also summarized the whistleblower awards issued in fiscal 2017, which totaled nearly $50 million to 12 individuals. The report emphasized some of the year’s more significant awards, including:
- The third-highest whistleblower award, of $20 million, to an individual who provided information leading to a speedy and successful enforcement action;
- The award of $7 million to three whistleblowers, in January 2017, that enabled the SEC to stop an investment scheme that defrauded hundreds of investors;
- The award of $5.5 million to a company insider who not only provided information that initiated an SEC enforcement action but continued to provide information and assistance to the SEC during its investigation; and
- The award of $4.5 million to a whistleblower who provided the SEC with industry-specific expertise during its enforcement action.
The report provided a breakdown of the tips that the SEC received:
- More than 3,200 phone calls from the public. The most tips originated in California, New York, Texas, Florida, and New Jersey.
- Tips came from 114 foreign countries, with the bulk of those tips originating from the United Kingdom, Canada, and Australia.
- Consistent with prior-year results, the most common types of complaints reported included corporate disclosures and financials (19 percent), offering fraud (18 percent), and manipulation (12 percent).
The annual report further provides some details about the individuals who have received awards since the whistleblower program’s inception:
- About 62 percent of the individuals receiving awards were current or former company employees when they reported information regarding wrongdoing;
- Of the whistleblower award recipients who were current or former employees of a subject company, almost 83 percent of them raised their concerns internally to their supervisors, compliance personnel, or through internal reporting mechanisms, or otherwise understood that their supervisor or relevant compliance personnel knew of the violations before they reported their concerns to the SEC.
The full report can be accessed here.