International - Written by on Sunday, November 27, 2011 10:40 - 0 Comments

UK whistleblowers cash in on US Dodd Frank bounty program providing windfall for UK investigators

Print Friendly

The UK and China top the list of non US whistleblowers accounting for nearly 30% each in the first report published by the US Securities and Exchange Commission this month.

The sample so far is small – the program only began in July and the report is through September 30.  However, the UK provided 9 whistleblowers, China 10.  These numbers dwarf reports from other non-US countries.

Under the Dodd Frank Act the SEC will pay a bounty to whistleblowers who voluntarily provide original information that leads to successful SEC enforcement actions (which include US Foreign Corrupt Practices Act violations) resulting in the imposition of monetary sanctions over $1,000,000.  We wrote some time ago predicting that the new law will produce an increase in reporting.

UK whistleblowers will have been tempted by the prospect of a minimum reward of 10% up to a maximum of 30% of the penalties collected by the SEC.  The program has been dubbed by some as “SFO Confidential – on steroids”

With telephone number penalties routinely ordered by the SEC the bounty program is a massive incentive to employees to whistleblow on their employers – and sits uneasily with firms own whistleblower hotlines.  Why whistle-blow internally when massive payouts are on offer under the SEC scheme?  Requests that payouts only be made if employees complaints were not dealt with under internal firm processes were rejected by the SEC.

The Dodd Frank whistleblower provisions have received relatively little coverage in the UK.

However, this report highlights that UK companies should not assume that they are immune from the impact of the new US rules.

The ripples of a report made to the SEC involving a UK whistleblower are likely to be felt in the UK in more ways than instant wealth for the whistleblower if their claim is accepted.

Reports will almost certainly be fed back to UK prosecuting authorities and regulators and be a catalyst for a parallel UK investigation.

 

Share Button


Comments are closed.

Brought to you by...

Barry Vitou &
Richard Kovalevsky Q.C.

The views expressed on this website are those of Barry Vitou & Richard Kovalevsky QC and/or our guest authors from time to time. Please see our terms of use

in association with...

Our Tweets

Friday, August 11, 2017 20:40

Former DoJ chief Sally Yates on being fired by Trump https://t.co/lmCjHKXJBj via @FT

Sunday, June 11, 2017 8:18

Opinion: As debate shifts from future of SFO to future of Theresa May we say: At last, fund the SFO properly. https://t.co/PwuCqHPkTq

Friday, June 9, 2017 12:21

SFO cat uses up another life! SFO set to stay after Theresa May's authority is seriously undermined.

Tuesday, May 23, 2017 11:44

Opinion: Conservatives must answer two basic questions about the plan to merge the SFO into the NCA https://t.co/OREkjacH2H

Thursday, May 18, 2017 21:07

Announcement of SFO merger into the NCA must be followed with detailed plans and assurances to SFO plans now https://t.co/Sbq5zt9yWP