SEC issues first annual report on whistleblower program

140px-US-SecuritiesAndExchangeCommission-Seal.svgThe Securities and Exchange Commission recently released data revealing the activities of the Office of the Whistleblower during its first year of operation.

Under the 2010 Dodd-Frank Act, the SEC is authorized to issue financial awards of between 10 and 30 percent to whistleblowers if the information provided to the commission leads to sanctions exceeding $1 million. Established by Dodd-Frank in 2011, the OWB is required to report its activities, complaints and sanctions to Congress on an annual basis.

The SEC’s first report revealed that the commission received more than 3,000 complaints and tips from whistleblowers in the U.S. and abroad during its first fiscal year. While most complaints were related to corporate disclosures and financial statements, 15.5 percent of complaints pertained to fraud and 15.2 percent of complaints were related to manipulation. Complaints regarding market events, municipal securities and public pension, FCPA, unregistered offerings and insider trading were among the least-reported.

While a majority of complaints originated in the U.S., the largest number of tips was received from the U.K., Canada and India. The number of complaints originating abroad constitutes 10.8 percent of the total tips received in 2012.

The SEC made its first award in August after a whistleblower’s information helped bring more than $1 million in sanctions resulting from a multi-million fraud operation. The recipient was compensated 30 percent, or $50,000, of the $150,000 received by the SEC by the end of the fiscal year.

The OWB is in the process of reviewing award applications received during 2012.

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