Dodd-Frank Whistleblower Report
We want whistleblowers—and their employers—to know that
employees are free to come forward without fear of reprisals.
In its 2015 annual report to Congress on the Dodd-Frank whistleblower program, the U.S. Securities and Exchange Commission (SEC) Office of the Whistleblower (OWB) reports the following for fiscal year 2015:
- 3,920 whistleblower tips received
- Tips received from all 50 states and 61 foreign countries
- 74% from the U.S. and its territories
- 26% from outside the U.S., led by the UK, Canada, China, India, and Australia
- 150+ award claims were issued Final Orders or Preliminary Determinations
- $37 million paid out to eight whistleblowers
SEC Chair Mary Jo White is quoted in the report as calling the whistleblower program “a success” which “we will work hard at the SEC to build on.”
One of the successes is the large (and growing) number of tips from a widespread geographic area received each year. OWB attributes this to its “extensive outreach efforts to publicize and promote the Commission’s whistleblower program.” It participates in “numerous webinars, media interviews, presentations, press releases, and other public communications.”
There is a lesson in that for all organizations—if you want to ensure your ethics and fraud hotline is well utilized, you will need to engage in ongoing outreach, publicity, and promotion designed to build and maintain awareness about the hotline.
Protecting whistleblowers from retaliation was a focus for OWB in 2015, and, it says, will continue to be a focus during fiscal year 2016. Steps taken primarily involve enforcement action. For example, the SEC brought charges against a company for including language in confidentiality agreements that (could have) impeded whistleblowers from reporting to the Commissions. (For related information, see “Whistleblowers and Confidentiality Agreements.”)
In addition, the SEC issued guidance clarifying that the Dodd-Frank anti-retaliation provisions apply to individuals who report information of possible securities law violations whether they report such information internally or to the Commission. The SEC also filed a number of amicus curiae briefs in support of that interpretation, which was upheld in September 2015 by the Second Circuit Court of Appeals in Berman v. Neo@Ogilvy LLC.
In its briefs the SEC has argued, for example, that recognizing Dodd-Frank anti-retaliation provisions as applying to individuals who have first reported their concerns internally helps protect them from retaliation. And, if such individuals were not covered by the anti-retaliation provisions, it would weaken the SEC’s ability to take enforcement action against employers that retaliate.
Which leads to a third example of the OWB’s focus this year. The Commission sent a message to an employer that had engaged in a series of retaliatory behaviors against an employee who had reported potential wrongdoing to the SEC; it issued the statutory maximum 30% award to the retaliated-against whistleblower.
There is another, different, lesson for organizations in these last two examples. Internal reporting gives you the opportunity to address organizational problems before they go public, and they might not go public at all if addressed appropriately. But, if retaliation is one of the responses, the SEC may help you regret it.
Not all organizations are directly affected by the Dodd-Frank Wall Street Reform and Consumer Protection Act. However, all have a stake in having a workforce that feels free to come forward on any number of issues without fear of reprisals.
Ethical Advocate provides comprehensive ethics and compliance solutions, including ethics and compliance training and confidential and anonymous hotlines, meeting regulatory and reporting needs such as those encouraged by the Dodd-Frank whistleblower provisions. Contact us for more information.
SEC. 2015 Annual Report to Congress on the Dodd-Frank Whistleblower Program, November 16, 2015. http://www.sec.gov/whistleblower/reportspubs/annual-reports/owb-annual-report-2015.pdf