2016 was a very good year for SEC whistleblowers – $130 million and still counting!

Regulators on a tear! In less than 30 days, FINRA issues nearly $3.5 million in fines
December 7, 2016
‘Twas the night after Christmas
December 20, 2016

Last Monday (Dec. 5), the Securities and Exchange Commission (SEC) awarded $3.5 million to a whistleblower for coming forward with information that led to a SEC enforcement action. Four days later (Friday, Dec. 9), the SEC did it again, awarding nearly $1 million to a whistleblower whose tip enabled the SEC to bring multiple enforcement actions against wrongdoers. One month ago (Monday, Nov. 14), the SEC issued an award of more than $20 million to a whistleblower – the third highest award since the program’s inception in 2012.

All told, in the last six months alone (and it’s only Tuesday, Dec. 13!), the SEC has paid out $130 million to 37 whistleblowers – $4.5 million of it just last week. That’s an average of $3 million per whistler!

Who’s at risk?

Duh…everyone. With a little more than two weeks left in 2016, it’s not over…yet.

The SEC regulators are ecstatic. Jane Norberg, Chief of the SEC’s Office of Whistleblowers notes that, “with the issuance of this second award in less than one week, we hope to continue to encourage individuals to submit high-quality tips that we can leverage to enforce the law and protect investors, and they can receive significant financial rewards for their valuable contributions to a case.

$$$ out of YOUR pocket

So, the SEC has awarded more than $130 million to 37 whistleblowers. And according to SEC stats, enforcement actions resulting from whistleblower tips have generated more than $874 million in financial remedies. More than 10,500 whistles have been blown since the program’s inception –and that’s just US stats, there are more tips coming in from overseas.

Ouch! So painful, and yes, so needless. Plus, given the SEC’s current two-a-week record, more actions and payouts are likely before New Year’s Day. Are you ready?

Whistleblowers receive rewards of from 10%-30% of the funds collected on sanctions over $1 million. So, whether you are the intended target or not, if you’ve been sanctioned, you are paying.

Why wait for the regulators to find and fine you

Do a preemptive strike. The SEC does like firms that self-police, self-report, and cooperate. First rule of thumb is to do the right thing. Second rule of thumb is if you see something, say something before someone else says something for you.

Why run the risk? Especially when compliance solutions can be so easy-to-use, and inexpensive?

Last week we blogged about FINRA delivering $3.5 million in “lumps of coals” to members on its “naughty, not nice” list. And like the SEC, they’re not resting on their laurels either. On which list Is your firm? Or your management? Supervisors? Compliance professionals?

How’s that working for you? Sleeping at night?

Stuff happens. It just does. But when it does, make sure you have the tools to ensure regulatory compliance, reduce your firm’s exposure, and avoid related financial consequences. You do have options.

Let’s talk (212-233-1155). Ask about Patrina’s comprehensive compliance solutions, compliant data capture + storage, and compliant recordkeeping specifically designed for the financial services community.

Let’s talk.

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