Whistleblowing – Compliance and Reporting Systems

By George Wilson

The unparalleled success of the SEC’s Whistleblower Program in uncovering hidden financial crimes and achieving successful enforcement has been well publicized.  In this September 21, 2021, blog post we highlight that the program has paid out over $1 billion in awards to whistleblowers.  

In this related Press Release Chair Gary Gensler emphasized the importance of the program:

 "Today's announcement underscores the important role that whistleblowers play in helping the SEC detect, investigate, and prosecute potential violations of the securities laws.  The assistance that whistleblowers provide is crucial to the SEC's ability to enforce the rules of the road for our capital markets."

One frequently overlooked aspect of the program’s success is how companies may need to adjust governance and policy related to whistleblower activity.  

In this environment that provides such strong incentives for whistleblowers to come forward, companies need to build appropriate governance and policies.  To help companies in this process, PLI’s InSecurities podcast, in Episode 47 – Whistleblower Tips: Advice From a Former Chief of the SEC’s Whistleblower Office, provides crucial information about developing policies and governance surrounding whistleblower processes.  Included are suggestions about how to develop parallel internal reporting systems and encourage, triage and investigate whistleblower tips.

As always, your thoughts and comments are welcome!

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