• Governance I Risk I Compliance Management

Whistleblowers make a tremendous contribution to the Commission’s ability to detect fraud and other securities law violations and protect investors and the American marketplace. As U.S. Securities and
Exchange Commission’s whistleblower program (SEC) Chair Gary Gensler recently noted, “[t]he assistance that whistleblowers provide is crucial to the SEC’s ability to enforce the rules of the road for our capital markets.”1

Record-Breaking Awards Paid and Claims Processed in FY 2021

In fiscal year 2021, which ended on Sept. 30, the SEC also obtained judgments and orders for nearly $2.4 billion in disgorgement and more than $1.4 billion in penalties, which represented a respective 33 percent decrease and 33 percent increase over amounts ordered in the prior fiscal year in these categories. More significantly, the Commission made more
whistleblower awards in FY 2021 than in all prior years combined. Some of the most common top tips to the Commission (SEC Office) of the Whistleblower involve: 

  1. Accounting fraud;
  2. Investment and securities fraud;
  3. Insider trading;
  4. Foreign bribery and other FCPA violations;
  5. EB-5 investment fraud;
  6. Broker-dealer anti-money laundering program violations;
  7. False or misleading statements about a company or investment;
  8. Inadequate internal controls;
  9. Violations of auditor independence rules; and
  10. Misleading or incomplete cybersecurity disclosures.

The success of the Commission’s whistleblower program in landmark FY 2021 demonstrates that it is a vital component of the Commission’s enforcement efforts. The awards made in 2021 will continue to encourage whistleblowers to report specific, timely, and credible information to the Commission, which will enhance the agency’s ability to detect wrongdoing and protect investors and the marketplace. If you operate in or with America you need to mitigate your risk now.


Spotlight on Foreign Corrupt Practices Act

The SEC can bring civil enforcement actions against issuers and their officers, directors, employees, stockholders, and agents for violations of the anti-bribery or accounting provisions of the FCPA. Companies and individuals that have committed violations of the FCPA may have to disgorge their ill-gotten gains plus pay prejudgment interest and substantial civil penalties. Companies may also be subject to oversight by an independent consultant. The SEC and the Department of Justice are jointly responsible for enforcing the FCPA. The SEC’s Enforcement Division has created a specialized unit to further enhance its enforcement of the FCPA.

ISO 37002 Whistleblowing Management Systems – Guidance

ISO 37002 Whistleblowing Management Systems. The International Organization for Standardization (ISO) has developed new guidelines for whistleblowing management systems — ISO 37002:2021. ISO 37002 provides guidelines for implementing, managing, evaluating, maintaining and improving a robust and effective whistleblowing management system. But what does it mean in practice, and how can it improve and add value to an organisation’s existing whistleblowing programme?

The ISO Whistleblowing Guidelines assist organisations in creating whistleblowing management systems based on trust, impartiality, and protection principles. The guidelines are adaptable, and their use will vary with the size, nature, complexity, and jurisdiction of the organisation’s activities. The ISO Whistleblowing Guidelines can assist an organisation in improving its existing whistleblowing policy and procedures or in complying with applicable whistleblowing legislation.

Sources: 1. Press Release, SEC Surpasses $1 Billion in Awards to Whistleblowers with Two Awards Totaling $114 Million, No. 2021-117 (Sept. 15, 2021).

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