The SEC’s First Annual Report from the Office of the Whistleblower

The Dodd-Frank Act requires that the Securities and Exchange Commission’s new Office of the Whistleblower report to Congress annually “on its activities, whistleblower complaints, and the response of the Commission to such complaints.”

Exchange Act Section 21F(g)(5) requires that the Office of the Whistleblower also report to Congress annually, specifically by October 30th of each year, on the number of whistleblower awards granted, the types of cases in which the awards were granted and on certain financial information regarding the Commission’s Investor Protection Fund, from which the awards are paid.

The first such annual report is now available, though it only covers the period from the effective date of the final whistleblower rules, August 12, 2011, through the Commission’s fiscal year-end, September 30, 2011. It does not include data on tips that were reported after Dodd-Frank was enacted but before the final whistleblower rules went into effect, though such tips are also potentially eligible for whistleblower rewards.

During the seven weeks for which data is available, the Commission received 334 whistleblower tips. Among these, the most common complaints related to market manipulation (54), offering fraud (52) and corporate disclosures and financial statements (51). Note, however, these tips were categorized by the whistleblowers themselves, not the Commission, and there are 84 that were submitted under the category of “other” or without a category at all, so it’s hard to say how accurate this information really is.

Click on the graphs below to enlarge them.

Whistleblower Tips By Allegation Type

Tips came in from 37 states and 11 foreign jurisdictions, with California (34), New York (24), Florida (19) and Texas (18) logging the most tips domestically, and China (10) and the United Kingdom (9) logging the most of any foreign jurisdictions. Also noteworthy, there were 87 tips that came in without an identifying jurisdiction.

Whistleblower Tips By Geographic Location (Domestic)
August 12, 2011 – September 30, 2011

Whistleblower Tips By Geographic Location (Foreign)
August 12, 2011 – September 30, 2011

The Commission didn’t pay out any whistleblower awards during the period covered by the report, and, as noted therein, it’s really too soon to draw any conclusions from the small amount of data presented. But it will be interesting to compare these numbers to what we get in next year’s report. Anyone care to go on record with a guess as to how many tips come in for fiscal-year 2012?

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