The Securities and Exchange Commission (''SEC'') recently published data showing significant increases in tips received under its Dodd-Frank Whistleblower Program. Released on November 16, the 2015 annual report also provided important guidance to companies on the SEC's whistleblower-related priorities through fiscal year 2016. The SEC's whistleblower program offers bounty payments in exchange for information that leads to successful enforcement actions. Dodd-Frank requires the SEC to report to Congress annually on the program's activities, whistleblower complaints received, and the Commission's response to complaints. SEC-regulated companies should be aware of the following four themes that emerged from the 2015 annual report:
(1) Whistleblower Tips Continue to Rise
The SEC continues to receive an increasing number of whistleblower complaints. The SEC received 3,923 total tips in fiscal year 2015, an 8% increase from fiscal year 2014 (3,620). The 2015 numbers also represent a 30% increase from 2012 (3,001), which was the first full year of the program. The bulk of the whistleblower complaints originated from five states: California (646), New York (261), Florida (220), Texas (220) and New Jersey (146). The SEC also received tips from 61 foreign countries, with the highest number originating from the United Kingdom, Canada, China, India and Australia.
Claims for awards continue to rise as well. The Commission paid more than $37 million to eight whistleblowers in 2015. Among other things, that figure included the SEC's highest award ever of $30 million paid to a single whistleblower at the beginning of fiscal year 2015, a maximum bounty payment of 30% of amounts collected in connection with the Commission's first anti-retaliation case, and a bounty of more than $1 million paid to a compliance professional in April 2015.
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Originally published in BNA Bloomberg's Securities Regulation & Law Report , 12/21/15.
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