SEC Reports a Record Number of Employee Whistleblowers This Year

In its Annual Report to Congress on the Dodd-Frank Whistleblower Program, the Securities and Exchange Commission reports that both the number of whistleblower claims and the magnitude of the financial awards stemming from those claims “were record-breaking” in Fiscal Year 2014.

Under the Dodd-Frank whistleblower incentive program, individuals who report original information that leads the SEC to recover monetary sanctions of $1 million or more are eligible to receive awards of 10 percent to 30 percent of that financial recovery.

Whistleblower tips from 2014

Notable findings of the report include:

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  • The SEC’s Office of the Whistleblower (OWB) received 3,620 whistleblower tips, a more than 20 percent increase in the number of whistleblower tips in two years.
  • The most common complaint categories reported by whistleblowers included Corporate Disclosures and Financials (16.9 percent), Offering Fraud (16 percent), and Manipulation (15.5 percent).
  • On Sept. 22, 2014, the SEC authorized an award of more than $30 million to a whistleblower “who provided key original information that led to a successful enforcement action.” This is the SEC’s largest whistleblower award to date.
  • The SEC initiated its first anti-retaliation action under the statute in FY 2014.
  • In FY 2014, the SEC received complaints from individuals in all 50 states, as well as from the District of Columbia and Puerto Rico, and in 60 foreign countries.
  • The greatest number of complaints were filed in California (556), Florida (264), New York (204), and Texas (208).

The full SEC Report includes a discussion of the Office of the Whistleblower’s activities and achievements for FY 2014, profiles of whistleblower award recipients, details about the types of whistleblower tips received, and information about the SEC investor protection fund.

This was originally published on Littler Mendelson’s Workplace Policy Update blog© 2014 Littler Mendelson. All Rights Reserved. Littler®, Employment & Labor Law Solutions Worldwide® and ASAP® are registered trademarks of Littler Mendelson, P.C.

Ilyse W. Schuman is a shareholder in the Washington, D.C. office of Littler Mendelson. She provides strategic counsel and representation to clients on a broad array of workplace issues and developments in Congress and executive branch federal agencies.

She is a member of the firm's Government Affairs practice and works with employers in multiple industries, including trade associations. She also leads the firm's Legislative and Regulatory practice.

A former top congressional staffer and policy advisor, Ilyse worked on the Senate Committee on Health, Education, Labor and Pensions from 2001 to 2008, serving as minority staff director and chief counsel. She began her work in the Senate as chief labor counsel for Senator Mike Enzi on the Subcommittee on Employment, Safety and Training, where she led legislative and oversight activities.

After leaving the Senate, Schuman joined a leading trade association of electro-industry manufacturers as vice president, where she served as managing director of the Medical Imaging and Technology Alliance, the collective voice of medical imaging equipment manufacturers. Additionally, she served as in-house counsel at a manufacturer and market and technology leader, where she advised the company on human resource matters. In law school, she was a member of the Journal of Law and Policy in International Business.

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