SEC Adopts Final Whistleblower Program Rules
Mary Schapiro presided over the vote approving the SEC whistleblower rules.
In a split vote, the SEC adopted final rules to implement the whistleblower program provisions enacted under Dodd Frank in July 2010. Chairman Mary Schapiro presided over the discussion, with Sean McKessy and Stephen Cohen of the SEC’s staff answering questions by the commissioners on the proposal.
Cohen said that the SEC had strengthened its Office of Market Intelligence to handle the incoming tips and would be adding a special Whistleblower page to a new Tips, Complaints, and Referrals section of the SEC’s webpage. McKessy said that they have not seen a significant increase in the number of tips to the SEC since the passage of Dodd Frank, but staff has seen an improvement in the number of high quality tips received.
Commissioners Walter and Aguilar praised the SEC staff for implementing a “robust public process” leading to the development of today’s rules. Commissioner Paredes dissented and said that he thought the rules did not adequately preserve the role of internal corporate compliance programs and the process for reporting of tips would be a deterrent to whistleblowers. Paredes also said he voted against the proposal because the rules as proposed would create an “undue risk of encouraging low quality submissions.” Paredes said the issue was not the merit of whistleblower programs, but anticipated problems created by this particular set of rules.
Schapiro called for the vote, and the final rules were passed 3 to 2.
Tags: abuse, corporate fraud, False Claims Act, fraud, government fraud, health care fraud, pharmaceutical fraud, retaliate, retaliation, Tax Fraud, tax whistleblower, waste, whistle blower, whistle blowing, whistleblower, whistleblowing, wrongful termination
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