© 2013 The Texas Lawbook.
By Mark Curriden, JD
Senior Writer for The Texas Lawbook
(November 26) – The U.S. Securities and Exchange Commission received 135 tips from Texans blowing the whistle on colleagues, bosses or business partners who they contended were violating federal securities laws, bribery statutes and corporate compliance regulations, according to a federal report issued this week.
The Office of the Whistleblower at the SEC issued a 22-page report stating that the agency had received 3,238 tips from whistleblowers during fiscal year 2013, which ended Oct. 1.
The SEC has paid out more than $15 million to corporate whistleblowers during the past two and a half years, including a single payment of $14 million. Additional seven-digit payouts are being reviewed, according to SEC lawyers.
California and New York, as expected, led the way with the most whistleblower tips to the SEC. Florida was third, while Texas reported the fourth highest total.
Here are some key excerpts from the report:
• The Commission’s goal continues to be the receipt of high-quality information concerning potential securities law violations. The number of whistleblower tips and complaints the Commission receives annually increased from 3,001 in the 2012 fiscal year to 3,238 in the 2013 fiscal year.
• From the establishment of the whistleblower program in August 2011 until the end of fiscal year 2013, the Commission has received 6,573 tips and complaints from whistleblowers.
• Fiscal year 2013 saw the Commission make its largest whistleblower award to date. On September 30, 2013, the Commission awarded more than $14 million to a whistleblower whose information led to an SEC enforcement action that recovered substantial investor funds. In less than six months after receiving the whistleblower’s tip, the Commission was able to bring an enforcement action against the perpetrators and secure investor monies. OWB hopes that award payments like this one will encourage individuals to come forward and assist the Commission in stopping securities fraud.
• The most common complaint categories reported by whistleblowers in the 2013 fiscal year were Corporate Disclosures and Financials (17.2 percent), Offering Fraud (17.1 percent), and Manipulation (16.2 percent).
• Since the inception of the Commission’s whistleblower program in August 2011, the Commission has granted awards to six whistleblowers, with four whistleblowers receiving awards in fiscal year 2013. In each instance, the whistleblower provided high-quality original information that allowed the Commission to more quickly unearth and investigate the securities law violation, thereby better protecting investors from further financial injury and helping to conserve limited agency resources.
• In sum, during fiscal year 2013, the Commission made $14,831,965.64 in award payments to whistleblowers under the Commission’s whistleblower program.
Click here to read the entire SEC report.
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