SEC Releases 2015 Whistleblower Report

On November 16, 2015, the Securities and Exchange Commission (“SEC”) released its 2015 Dodd-Frank Whistleblower Program Annual Report with noted activity in four key areas:

Whistleblower Activity Up — In the fiscal year ended September 30, 2015, the SEC reported an eight percent increase in whistleblower tips — to 3,923 in 2015 vs. 3,620 in 2014. The 2015 tally is a 30% increase from 2012, the first full year of the program. The majority of whistleblower tips came from five states:

  • California (646)
  • New York (261)
  • Florida (220)
  • Texas (220)
  • New Jersey (146)

The SEC also received tips from overseas, with the majority of those coming from the U.K., Canada, China, India and Australia. In 2015, the SEC paid more than $37 million to eight individual whistleblowers, including the single highest award in the program’s history — $30 million — to one whistleblower.

Financial Fraud Complaints Up — The majority of whistleblower tips fall into three categories: disclosures and financials, offering fraud and manipulation. The SEC saw complaints about disclosures and financials rise 13% in 2015, which the agency said is consistent with its focus on financial reporting and accounting fraud.

Internal Reporting Protection — The SEC continues to focus on providing protection for internal reporting. Individuals who report violations to the SEC are protected from employer retaliation by Dodd-Frank. The Commission has also enacted rules that extend anti-retaliation protection to whistleblowers that only make internal reports under Sarbanes-Oxley.

Confidentiality Agreement Focus — The SEC brought its first enforcement action under Rule 21F-17(a) in 2015, demonstrating its interest in confidentiality agreements that could potentially quash whistleblowing activities. Rule 21F-17(a) prohibits any interference with an individual seeking to communicate with the Commission about a potential securities law violation. The annual report noted that “[a]ssessing confidentiality agreements for compliance with Rule 21F-17(a) will continue to be a top priority for [the program] into Fiscal Year 2016.”

The Cogdell Law Firm is a full service criminal litigation and appellate law firm. We provide client-focused representation at all stages of the process, whether our clients are seeking to avoid charges, have been charged, or are seeking reversal of a conviction on appeal. When results matter most, contact Dan Cogdell at (713) 426-2244or dan@cogdell-law.com.

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