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Print articleEncouraging and Addressing Whistleblowers: The New Normal
May, 2015 - Ronald W. Breaux, Kit Addleman, Emily Westridge Black, Phong Tran
The Securities Exchange Commission (“SEC”) is continuing to promote its whistleblower reward program and recently announced awards to two individuals who provided key information leading to successful SEC enforcement actions. One whistleblower, a compliance officer, will receive an award of approximately $1.5 million. The other whistleblower, a former head trader, will receive a maximum payout of 30 percent of the amounts collected (which totals over $600,000). The string of recent whistleblower awards and the SEC’s emphasis on the whistleblower complaint process highlight what has become the new “normal” for public companies – spelling out policies for and maintaining an environment to encourage internal reporting of potential misconduct. Only by developing a mechanism that allows employees to internally report suspected misconduct without fear of retribution, and by responding promptly and appropriately to reports of potential violations, can a company stay abreast, or even ahead, of potential SEC investigations.
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