2017-2018 SEC whistleblowing review: insights and trends

Abstract

Purpose The purpose of this review is to unpack 2017-2018 US Securities and Exchange Commission (SEC) whistleblower developments and trends. Design/methodology/approach This paper draws on statistics in the SEC’s 2017 Annual Report to Congress on the Whistleblower Program and examines post-report SEC whistleblower activity, including three SEC whistleblower awards in March 2018 totaling $80 million+. Findings Several notable whistleblowing developments and trends have emerged in recent years, including an increase in total tips; an increase in international tips; higher-value awards, including multiple awards in excess of $20m; and interest in punishing companies that discourage and/or retaliate against whistleblowers. In addition, the SEC recently issued its first-ever award under the Exchange Act’s “safe harbor” provision. Originality/value This paper contains valuable insights about the activities and priorities of the SEC Office of the Whistleblower from experienced securities and white-collar-litigation lawyers.

Whistleblowing: protection or discouragement

“…144-145) contend that increases in whistleblowing result in higher rates of detection and conviction for corporate crime. International surveys of fraud show consistently that whistleblowers are instrumental in its detection, demonstrating its effectiveness in fighting corruption (Meshulam et al, 2018;Wolfe et al, 2014).…”