Canadians Among Top Whistleblowers Under Dodd-Frank Program

Posted by Shannon Walker

on November 18, 2013

graphic logo securities and exchange commission united states

The Securities and Exchange Commission just released its 3rd Annual Report on the success of the Whistleblower Program.  A few of the highlights include:

  1. There was over $14 million paid out to whistleblowers as a result of tips
  2. There is over $439 million in funding available to pay whistleblowers for tips
  3. There were 3,238 formal tips received in 2013 (up 8% from 2012)
  4. The most common complaint by category is “Corporate Disclosures and Financials (17.2% of tips)

Most interesting for those of us to the North is that Canadians are doing their fair share when it comes to blowing the whistle on corporate malfeasance in the United States.

Tips from Canada under the Dodd-Frank Whistleblower Program rose to 62 during the Securities and Exchange Commission’s 2013 fiscal year, compared to 66 from Britain, which topped the list of foreigners, and 52 from China, which ranked No. 3.

For Canada, that marked an increase from 46 in 2012 and just 1 in 2011, compared to 74 and 9 for Britain and 27 and 10 for China in the same periods.

Over the course of the year, the program handed out more than $14.8-million (U.S.) in awards, with one payment of about $14-million, its largest ever, accounting for the bulk of the money.

“While the amounts paid are significant, the bigger story is the untold numbers of current and future investors who were shielded from harm thanks to the information and co-operation provided by whistleblowers,” the agency’s chief, Sean McKessy, said in the report.

The total number of tips to the program rose in 2013 to 3,238 from 3,001 a year earlier and 334 in 2011. California, New York and Florida led the way.

Those resulted in 118 enforcement judgments and orders, the SEC said.

Tips from Canada outpaced those from many individual states.

Beyond the enforcement of actions against corporations and individuals crossing regulatory lines, the SEC went out of its way in the report to emphasize actions it will also take to protect whistleblowers:

“Office of the Whistleblower is coordinating actively with Enforcement Divisions staff to identify matters where employers may have taken retaliatory measures against individuals who reported potential securities law violations or have utilized confidentiality, severance, or other agreements in an effort to prohibit their employees from voicing concerns about potential wrongdoing.”

So not only are companies going to be held accountable for misdeeds, but also how they handle the person who reported the misdeeds.  This protection seems to be the equivalent of “obstruction of justice” that has resulted in additional charges, civil and criminal, for companies and individuals accused of fraud who then tried to cover it up … a big No-No.

This commitment to protecting the Whistleblower is a huge step forward and one, that we at WhistleBlower Security greatly support.