Friday marked the effective date of the SEC’s Whistlelower Rule. Lucky whistleblowers can now cash in with bounties of up to 30% of the government’s recovery when cases involve in excess of $1 million. The question I have is whether there was spike in tips submitted over the weekend?
The SEC is trying to make it easy. They rolled out a fancy new website:
To qualify for an award under the Whistleblower Program, you must submit information regarding possible securities law violations to the Commission in one of the following ways:
- Online through the Commission’s Tip, Complaint or Referral Portal; or
- By mailing or faxing a Form TCRto:
SEC Office of the Whistleblower
100 F Street NE
Mail Stop 5971
Washington, DC 20549
Fax: (703) 813-9322
Please note that if you choose to submit your information anonymously, i.e., without providing your identity or contact information, you must be represented by, and provide contact information for, an attorney in connection with your submission in order to be eligible for an award.
After years of the government pushing for companies to beef up internal compliance and use hotlines to report problems, Congress opened a big barn door for people to go around internal systems. I suppose they think more people like Harry Markopolos will step up and prevent the next Madoff, or Enron, or Worldcom.
Sure, the rewards can be limited for bypassing internal reporting. But people will see the dollar signs. Inevitably there will be some sketchy lawyer advertisements encouraging you get in contact with them so they can help you qualify for the whistleblower bounty.
I suppose it’s too much to expect a big change instantly. I will be interested to see if the new rule has any impact.
- SEC Office of the Whistleblower
- Claim a Reward
- SEC Release 34-64545 Implementation of the Whistleblower Provisions of Section 21F of the Securities Exchange Act of 1934 (.pdf) – Final Rule
- The New SEC Whistleblower Rule – prior post on Compliance Building