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The power of the US SEC whistleblower programme: What compliance and regulatory professionals should know
Journal of Financial Compliance,
3
(3),
262-272
(2020)
Abstract
The US Securities and Exchange Commission’s (SEC) whistleblower programme has become one of the most effective tools for enforcing US securities law. This paper provides the historical context that led to the creation of the programme, outlines its main features, and reports on its overall effectiveness and results. In addition, the legal and practical challenges faced by the SEC’s Office of the Whistleblower, which takes the lead in evaluating whistleblower submissions, are examined and some solutions to these challenges are proposed. Lastly, the paper provides practical advice and do’s and do not’s for companies and their internal compliance and audit employees to implement common-sense policies and procedures to address the very real possibility that, because of a US Supreme Court decision two years ago, their employees may be incentivised to report directly to the SEC rather than through internal compliance mechanisms.
Keywords: SEC whistleblower programme; internal compliance; Dodd-Frank whistleblower; Sarbanes–Oxley whistle-blower; whistleblower protection
The full article is available to subscribers to the journal.
Author's Biography
Sean X. Mckessy a partner at Phillips & Cohen LLP, was the first Chief of the US Securities and Exchange Commission’s (SEC) Office of the Whistleblower and helped establish the procedures and policies for handling the thousands of whistleblower claims the SEC receives annually. During his five-year tenure, he played a key role in the SEC’s efforts to reward and protect whistleblowers. Sean now represents whistleblowers at Phillips & Cohen, which has the longest-standing and most successful practice devoted exclusively to representing whistleblowers, with more than US$12.3bn recovered as a result of the firm’s cases. Sean served previously at the SEC in the Enforcement Division. He later held corporate compliance positions as corporate secretary for Altria Group Inc. and AOL Inc. and as securities counsel for Caterpillar Inc. He has been named one of the ‘Top Minds’ in corporate governance, risk and compliance by Compliance Week.
