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Whistle Blower Report to Congress

Whistle Blower Report to Congress

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Published by Allen Yesilevich

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Published by: Allen Yesilevich on Nov 04, 2010
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01/12/2015

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_____________________________________
Annual Report on Whistleblower Program
As Required by Section 21F(g)(5) of the Securities Exchange Act of 1934
This is a Report of the Staff of theU.S. Securities and Exchange CommissionOctober 2010
 
 
ANNUAL REPORT ON WHISTLEBLOWER PROGRAM
As Required by Section 21F(g)(5)
of the Securities Exchange Act of 1934
I. INTRODUCTION
The staff of the U.S. Securities and Exchange Commission (“Commission”) is providingthis report pursuant to Section 21F(g)(5) of the Securities Exchange Act of 1934, 15 U.S.C. 78aet seq. (“Exchange Act”). Section 922 of the Dodd-Frank Wall Street Reform and ConsumerProtection Act (“the Dodd-Frank Act”) amended the Exchange Act by adding Section 21F,entitled “Securities Whistleblower Incentives and Protection.” Among other things, Section 21Festablishes a whistleblower program that requires the Commission to pay an award, underregulations prescribed by the Commission and subject to certain limitations, to eligiblewhistleblowers who voluntarily provide the Commission with original information about aviolation of the federal securities laws that leads to the successful enforcement of a covered judicial or administrative action, or a related action.Section 21F(g)(5) requires the Commission to submit an annual report to the Committeeon Banking, Housing and Urban Affairs of the Senate and the Committee on Financial Servicesof the House of Representatives on the whistleblower award program, including:
A description of the number of awards granted and thetypes of cases in which the awards were granted during thepreceding fiscal year;
The balance of the Securities and Exchange CommissionInvestor Protection Fund (“Fund”) at the beginning of thepreceding fiscal year;
The amounts deposited into or credited to the Fund duringthe preceding fiscal year;
The amount of earnings on investments made under Section21F(g)(4) during the preceding fiscal year;- 2 -
 
 
The amount paid from the Fund during the preceding fiscalyear to whistleblowers pursuant to Section 21F(b);
The balance of the Fund at the end of the preceding fiscalyear; and
A complete set of audited financial statements, including abalance sheet, income statement and cash flow analysis.This report covers the period July 22, 2010 (the effective date of The Dodd-Frank Act) throughSeptember 30, 2010.
1
As part of the Dodd-Frank Act, Congress substantially expanded the Commission’sauthority to pay whistleblower awards and enhanced the anti-retaliation protections available towhistleblowers. Section 922 of the Dodd-Frank Act added new Section 21F to the ExchangeAct.”
2
Under new Section 21F, the Commission must pay awards, in the aggregate amount of atleast 10 but not more than 30 percent to eligible whistleblowers who voluntarily provide theCommission with original information about a violation of the securities laws that leads tosuccessful enforcement of an action brought by the Commission that results in monetarysanctions exceeding $1,000,000, and of certain related actions. The awards amounts are basedon the monetary sanctions actually collected in the Commission action or related action. Thelegislative history states that the purpose of this provision was to elicit high-quality tips bymotivating persons with inside knowledge “to come forward and assist the Government toidentify and prosecute persons who have violated the securities laws . . . .”).
31
Section 924(d) of the Dodd-Frank Act separately requires the Commission’s Whistleblower Office to reportannually to Congress on its activities, whistleblower complaints and the response of the Commission to suchcomplaints. As described below, the Commission is still in the process of establishing and staffing theWhistleblower Office. Accordingly, no separate report from that Office will be provided for fiscal year 2010. Thefirst annual report by the Whistleblower Office will be provided following fiscal year 2011.
2
Pub. L. No. 111-203, § 922(a), 124 Stat 1841 (2010).
3
See S. Rep. No. 111-176 at 110 (2010).
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