The Real Impact of the SEC’s New Whistleblower Program

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22 Responses

  1. Howard Sklar says:

    I think a question will be what the SEC does with the information. Will they share with the DOJ? Or will they then contact the company to spur an internal investigation?

    I think the regulators will end up giving more credit for ongoing cooperation because the company automatically loses their 2 points for voluntary disclosure when the origination is via whistleblower.

  2. Howard Sklar says:

    I think a question will be what the SEC does with the information. Will they share with the DOJ? Or will they then contact the company to spur an internal investigation?

    I think the regulators will end up giving more credit for ongoing cooperation because the company automatically loses their 2 points for voluntary disclosure when the origination is via whistleblower.

  3. michael volkov says:

    Hey Howard — great to hear from you. I look forward to our blogger tour.!!! I ahve enjoyed your writing and your insights. Lets work together on something.

    As to information SEC gathers, they will definitely pass it on to DOJ since it will be confidential and relaible (at least in their minds). This is the danger — DOJ will be able to open a case, and use tactics that normally cannot be done in voluntary disclosure case. If DOJ decides not to too any rpoactive investigation, then they will contact company and tell them to conduct internal investigation.

  4. michael volkov says:

    Hey Howard — great to hear from you. I look forward to our blogger tour.!!! I ahve enjoyed your writing and your insights. Lets work together on something.

    As to information SEC gathers, they will definitely pass it on to DOJ since it will be confidential and relaible (at least in their minds). This is the danger — DOJ will be able to open a case, and use tactics that normally cannot be done in voluntary disclosure case. If DOJ decides not to too any rpoactive investigation, then they will contact company and tell them to conduct internal investigation.

  5. michael volkov says:

    Hey Howard — great to hear from you. I look forward to our blogger tour.!!! I ahve enjoyed your writing and your insights. Lets work together on something.

    As to information SEC gathers, they will definitely pass it on to DOJ since it will be confidential and relaible (at least in their minds). This is the danger — DOJ will be able to open a case, and use tactics that normally cannot be done in voluntary disclosure case. If DOJ decides not to too any rpoactive investigation, then they will contact company and tell them to conduct internal investigation.

  6. Anonymous says:

    How responsive will the SEC and DOJ be to Whistleblower ("WB") submissions? If a WB submits who is still with a corporation and is suffering retaliation, will the SEC and DOJ react or will it be too late? Besides sitting around waiting for possible compensation, can a WB lodge a wrongful dismissal or breach of contract proceedings? Could a WB initiate a personnel action against directors and senior officers for negligence and breach of fiduciary duties? Has there been such cases in the US on thus point of liability owed by US directors and officers and personnel, in particular, foreign personnel? Are mission statements, codes of conduct etc considered contract terms within an employment agreement? Just some thoughts for discussion.

  7. Anonymous says:

    How responsive will the SEC and DOJ be to Whistleblower ("WB") submissions? If a WB submits who is still with a corporation and is suffering retaliation, will the SEC and DOJ react or will it be too late? Besides sitting around waiting for possible compensation, can a WB lodge a wrongful dismissal or breach of contract proceedings? Could a WB initiate a personnel action against directors and senior officers for negligence and breach of fiduciary duties? Has there been such cases in the US on thus point of liability owed by US directors and officers and personnel, in particular, foreign personnel? Are mission statements, codes of conduct etc considered contract terms within an employment agreement? Just some thoughts for discussion.

  8. Anonymous says:

    How responsive will the SEC and DOJ be to Whistleblower ("WB") submissions? If a WB submits who is still with a corporation and is suffering retaliation, will the SEC and DOJ react or will it be too late? Besides sitting around waiting for possible compensation, can a WB lodge a wrongful dismissal or breach of contract proceedings? Could a WB initiate a personnel action against directors and senior officers for negligence and breach of fiduciary duties? Has there been such cases in the US on thus point of liability owed by US directors and officers and personnel, in particular, foreign personnel? Are mission statements, codes of conduct etc considered contract terms within an employment agreement? Just some thoughts for discussion.

  9. openairblog says:

    I have to agree that the SEC will share with the DOJ. It gets frustrating sometimes because there's no reciprocation. As you're well aware, whatever information the DOJ gets through the grand jury can't be disclosed to the SEC.

    Does that apply to wiretaps under Title III?

    As to anonymous, I think that the SEC will be as responsive as possible given budgetary and human resource constraints. I think the driving mantra there nowadays has to be "avoid another Madoff." But in order to handle the one or two tips a day they're getting, and that's just at the start, they'll have to staff up to an additional 700 or so investigations a year. That's an "all hands on deck" kind of challenge, and the SEC doesn't have that many hands.

    I don't know that a whistleblower could file a breach of fiduciary duty action, but a shareholder could, right? I have to go back and re-read Nature's Sunshine.

    Howard Sklar

  10. openairblog says:

    I have to agree that the SEC will share with the DOJ. It gets frustrating sometimes because there's no reciprocation. As you're well aware, whatever information the DOJ gets through the grand jury can't be disclosed to the SEC.

    Does that apply to wiretaps under Title III?

    As to anonymous, I think that the SEC will be as responsive as possible given budgetary and human resource constraints. I think the driving mantra there nowadays has to be "avoid another Madoff." But in order to handle the one or two tips a day they're getting, and that's just at the start, they'll have to staff up to an additional 700 or so investigations a year. That's an "all hands on deck" kind of challenge, and the SEC doesn't have that many hands.

    I don't know that a whistleblower could file a breach of fiduciary duty action, but a shareholder could, right? I have to go back and re-read Nature's Sunshine.

    Howard Sklar

  11. openairblog says:

    I have to agree that the SEC will share with the DOJ. It gets frustrating sometimes because there's no reciprocation. As you're well aware, whatever information the DOJ gets through the grand jury can't be disclosed to the SEC.

    Does that apply to wiretaps under Title III?

    As to anonymous, I think that the SEC will be as responsive as possible given budgetary and human resource constraints. I think the driving mantra there nowadays has to be "avoid another Madoff." But in order to handle the one or two tips a day they're getting, and that's just at the start, they'll have to staff up to an additional 700 or so investigations a year. That's an "all hands on deck" kind of challenge, and the SEC doesn't have that many hands.

    I don't know that a whistleblower could file a breach of fiduciary duty action, but a shareholder could, right? I have to go back and re-read Nature's Sunshine.

    Howard Sklar

  12. michael volkov says:

    You are right about DOJ's ability to share with SEC — does not work with Title III information. I expect SEC will have to staff up — they have 43 slots allocated to new whistleblower section. They ahve to make sure they investigate the complaints for fear of another Madoff, as you suggest. Shareholders can definitely sue on the ficuary breach — I doubt whistleblowers can but you never know these days — Mike V

  13. michael volkov says:

    You are right about DOJ's ability to share with SEC — does not work with Title III information. I expect SEC will have to staff up — they have 43 slots allocated to new whistleblower section. They ahve to make sure they investigate the complaints for fear of another Madoff, as you suggest. Shareholders can definitely sue on the ficuary breach — I doubt whistleblowers can but you never know these days — Mike V

  14. michael volkov says:

    You are right about DOJ's ability to share with SEC — does not work with Title III information. I expect SEC will have to staff up — they have 43 slots allocated to new whistleblower section. They ahve to make sure they investigate the complaints for fear of another Madoff, as you suggest. Shareholders can definitely sue on the ficuary breach — I doubt whistleblowers can but you never know these days — Mike V

  15. Anonymous says:

    Nature's Sunshine? Apologies for my ignorance

  16. Anonymous says:

    Nature's Sunshine? Apologies for my ignorance

  17. Anonymous says:

    Nature's Sunshine? Apologies for my ignorance

  18. Anonymous says:

    Nature's Sunshine? Apologies for my ignorance

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