Financial Regulation and Compliance: How to Manage Competing and Overlapping Regulatory Oversight, + Website

CHAPTER 3 How to Manage Whistleblowers' Complaints

Whistleblower claims can be a unique challenge for a company. When I served as Inspector General of the SEC between 2007 and 2012, my office received new whistleblower complaints nearly every day. Many of the complaints provided very important information that led to investigations and audits that uncovered significant waste, fraud, and abuse with the SEC's divisions and offices. However, many of these complaints were either nonsensical or contained information that later turned out to be wholly inaccurate. We also received quite a number of complaints from employees facing disciplinary action or termination who were attempting to leverage their complaints in order to make it more difficult for their supervisors to finalize disciplinary action against them. This strategy actually worked in many cases as supervisors were afraid of being accused of retaliation and backed off from disciplinary actions against the whistleblowers when they were informed that a complaint had been filed. This same set of circumstances can, and frequently does, occur in companies who face whistleblower complaints.

3.1 OVERSIGHT AND FAILURES OF THE SEC'S WHISTLEBLOWER PROGRAM

In addition, whistleblower complaints seem to be increasing in recent years, particularly those filed with the SEC as a result of the SEC's recently expanded whistleblower program following the Dodd-Frank Act. Congress mandated that the SEC completely restructure its whistleblower ...