According to the latest annual report from the SEC’s Office of the Whistleblower, the number of whistleblower reports and the total value of whistleblower awards continued at elevated levels during fiscal 2019 (which ended September 30, 2019). Though the reports and awards remained high during the fiscal year, both were down relative to the prior fiscal year. And while the aggregate award values and even several individual awards during the fiscal year are impressive, the small number of awards relative to the vast numbers of whistleblower reports is noteworthy and striking, as is discussed further below. The Office of the Whistleblower’s November 15, 2019 report can be found here.
Continue Reading

While the most common type of whistleblower may be a disgruntled employee, others can be whistleblowers, too. And as a recent SEC enforcement action highlights, interfering with these others’ attempts to communicate with the SEC can violate the agency’s whistleblower protection rules. In an amended complaint filed on November 4, 2019 in a pending SEC enforcement action, the agency alleges that the defendant company and one of its principals violated the SEC’s whistleblower rules by requiring the company’s investors to enter agreements in which the investors agreed not to contact the SEC or other regulatory enforcement authorities. The SEC alleges that these actions violated the agency’s whistleblower rules. A copy of the SEC’s November 4, 2019 press release about the amended complaint can be found here.  
Continue Reading

Whistleblowing has a long and respected tradition in the United States. In more recent times, whistleblowing and its protections have been part of several legislative schemes, including, for example, the creation in the Dodd-Frank Act of the SEC Whistleblower Program. The recent whistleblower complaint about President Trump’s July 2019 phone call with Volodymyr Zelensky, the President of Ukraine, underscores the continued important role of whistleblowing in the our political and business culture. As the events surrounding the recent whistleblowing complaint also show, whistleblowing is often regarded as a provocative act, and that, at a minimum, whistleblowing can be highly divisive.

A recently published book, “Crisis of Conscience: Whistleblowing in the Age of Fraud,”  written by journalist Tom Mueller, takes a detailed look at the role of whistleblowing in our culture, and the ways in which, despite all of the surrounding controversy, whistleblowing remains an indispensable part of maintaining order and enforcing our values and expectations.
Continue Reading

Frank Hülsberg
Burkhard Fassbach

In the following guest post, Frank Hülsberg, a Partner for Governance, Risk, Compliance & Technology at Warth & Klein Grant Thornton AG in Düsseldorf, and Burkhard Fassbach, a D&O-lawyer in private practice in Germany, take a look at the EU’s new Whistleblower Directive. I would like to thank Frank and Burkhard for allowing me to publish their article. I welcome guest post submissions from responsible authors on topics of interest to this site’s readers. Please contact me directly if you would like to submit a guest post. Here is Frank and Burkhard’s article.
Continue Reading

On March 26, 2019, the SEC announced that it was awarding two whistleblowers a total of $50 million for providing the agency with information that led to a successful enforcement action. The two awards consisted of an award to one individual of $13 million and an award to a second individual of $37million. The $37 million award is the third largest award in the history of the SEC’s whistleblower program. The SEC’s March 26, 2019 press release announcing the awards can be found here. The SEC’s whistleblower award order can be found here.
Continue Reading

The SEC Whistleblower Program had a “record-breaking year” during the 2018 fiscal year that ended on September 30, 2018, according the latest annual report from the agency’s Office of the Whistleblower. During the fiscal year, the agency not only made total awards exceeding the aggregate amount awarded in the entire prior history of the program, but it also made the largest separate awards in the program’s existence. The number of whistleblower reports during the fiscal year also increased over 20 percent, the largest annual increase in the number of reports in the program’s history. The SEC’s Office of the Whistleblower’s 2018 Annual Report can be found here.
Continue Reading

Amidst the flurry of Supreme Court decisions, new lawsuits, and other activity in the last few days, I have not yet had the chance to comment on a particularly important development earlier this week. That is, on March 19, 2018, the SEC announced the two largest whistleblower bounty awards in the history of its whistleblower bounty program. The value of the two awards to three whistleblowers, whose reports led to a $415 settlement with Merrill Lynch, totaled roughly $83 million. These awards are significant, and not just because of their size, as discussed below. The SEC’s March 19, 2018 press release about the awards can be found here, and the SEC’s heavily redacted March 19, 2018 Order Determining Whistleblower Award Claims can be found here.
Continue Reading

The SEC’s whistleblower program is now entering its seventh year. The SEC’s Office of the Whistleblower’s November 15, 2017 annual report to Congress underscores that the agency’s whistleblower program continues to grow and remains an important part of the agency’s enforcement efforts. The number of whistleblower reports submitted to the agency once again increased in the 2017 FY, and the whistleblower reports continue to lead to significant enforcement recoveries, as well as to significant bounty awards to the whistleblowers, as detailed below. The Office of the Whistleblower’s 2017 report can be found here.
Continue Reading

gavelWithin the Dodd-Frank Act’s whistleblower provisions, Congress included some stiff anti-retaliation protections. Since the Act’s passage, however, the lower federal courts have struggled to try to determine whether the anti-retaliation protections apply only to whistleblowers who file reports with the SEC or whether or not the protections extend to individuals who file internal whistleblower reports within their own companies. A split on this issue has developed within the federal circuit courts and now the United States Supreme Court may have the opportunity to address the question.
Continue Reading

SEC logoWhen Congress created the SEC Whistleblower program in the Dodd-Frank Act, one of the requirements was that the SEC’s Office of the Whistlblower would provide an annual report to Congress. On November 15, 2016, the SEC released its annual whistleblower report for the 2016 fiscal year (which ended September 30, 2016). The report shows that the agency continues to make substantial awards to whistleblowers, with six of the ten largest awards being made in FY 2016. The report also shows that the volume of whistleblower tips to the agency continues to increase as well. A copy of the agency’s FY 2016 report can be found here.
Continue Reading