December 31, 2010:  By that date, SEC Enforcement expects to have in place the technology to electronically catalog all tips and complaints about alleged securities violations.  So much for Phase One.  Complicating matters is the fact that complaints and tips come in various shapes, sizes and forms - by mail, phone calls, emails, interviews.

Robert Khuzami, Director of Enforcement, expects the new system to avoid past bottlenecks and duplication that arose because complaints traditionally had been fielded by individual SEC offices and filed there.  "We will have all of it in one place, searchable, which will do a lot for us in the long run."  Installation will be in 2 phases:  (i) improve the agency's ability to track and search information it receives - by 12/31/10;  (ii) add tools for analyzing the data - by 2011. 

    Features, Benefits of New Process.   The system makes it easier to file complaints online, using a tool that prompts the person making the complaint to answer certain questions, depending on the allegation.  SEC staff will input telephone complaints, using a similar program.  Handwritten complaints will be keyed in, using the same format. This will standardize the information available to staff everywhere.  It will also enable the SEC to better prioritize its information, and to conduct searches for, say, specific types of high-risk complaints.

e.g. - multiple complaints about a hypothetical law firm related to fraudulent offerings, might lead SEC staff to suspect that the lawyers are writing improper opinion letters that issuers can use to avoid registering the offering with the SEC.  Agents could more quickly identify that firm as suspicious.

Improving the SEC's handling of whistle-blower complaints has been a priority for Chairman Mary Schapiro, who since taking over in 2009 has pledged to "right the wrongs" that plagued the SEC in the Madoff and Stanford investigations, among others.  The new program also will be used to digest new types of information the Agency receives from a new program that was established by Dodd-Frank - one that compensates some whistle-blowers.  People providing "original information" about frauds that lead to $1 million or more in sanctions could net as much as 30% of the penalties and recovered funds collected by the SEC.  The program guarantees at least 10% of the awards collected, a calculation that could lead to multimillion-dollar payouts.   [WSJournal, 10/25]