[ by Howard Haykin ]

The SEC Office of the Whistleblower has been a popular hub at the Agency during its first year in existence.  Already the SEC has received 3,001 tips - that averages out to more than 13 tips each business day.  The tips, complaints and referrals have been received from all 50 states, the District of Columbia, the U.S. territory of Puerto Rico, as well as 49 countries outside of the United States.

Those statistics come out of the SEC's 2012 Annual Report on The Dodd-Frank Whistleblower Program, that was released today.   The report summarizes the activities of the SEC's Office of the Whistleblower, which is authorized to issue financial rewards to eligible individuals who voluntarily provide original information that leads to successful Commission enforcement actions that involve the imposition of monetary sanctions in excess of $1,000,000, and certain successful related actions.

Awards are required to be made in the amount of 10% to 30% of the monetary sanctions collected.  Awards are paid from the Commission’s Investor Protection Fund .  Among other things, the 15-page report notes:

• The first award was paid to a whistleblower who helped the SEC stop an ongoing multi-million dollar fraud. The award reflected 30% of the sanctions recovered - the maximum allowed.
• The most common complaints related to:  (i) corporate disclosures and financials (18.2%);  (ii) offering fraud (15.5%)p;  and, (iii) manipulation (15.2%).
• There were 143 enforcement judgments and orders issued during fiscal year 2012 - each potentially could qualify as eligible for a whistleblower award. 

SEC Chairman Mary Schapiro beamed while discussing the Offices achievements for its first year:  "In just its first year, the whistleblower program already has proven to be a valuable tool in helping us ferret out financial fraud.  When insiders provide us with high-quality road maps of fraudulent wrongdoing, it reduces the length of time we spend investigating and saves the agency substantial resources."

Status of Investor Protection Fund.   At fiscal year end, 9/30/12, the Fund was fully funded, as shown in the following accounting summary:

Balance of Fund at beginning of fiscal FY 2012 year                                                          $452,788,043.74
Amounts deposited into or credited to Fund during fiscal year                                                              $0.0019
Amount of earnings on investments during fiscal year                                                               $757,248.07
Amount paid from Fund during fiscal year to whistleblowers                                                     ($45,739.16)
Amount disbursed to Office of the Inspector General during fiscal year                                   ($69,727.07)

              Balance of Fund at end of the fiscal year                                     $453,429,825.58
 

For further details, go to:   [SEC PR 12-229, 11/15/12]   

[The SEC's 2012 Annual Report on The Dodd-Frank Whistleblower Program]

[The Whistleblower Office page on SEC.gov - run by Sean McKessy]