SEC Signals Strong Support for Whistleblowers

In the first seven months of its fiscal year, the SEC has significantly ramped up whistleblower awards, according to the Wall Street Journal. Over a typical year, the agency issues about seven award decisions, but so far it has issued twice that amount, the WSJ reported.  On April 16, the SEC awarded more than $27 million to a whistleblower who alerted the agency to misconduct occurring, in part, overseas, an amount among the top ten highest awards in the program’s history. Corporate governance specialists caution that while firms are distracted by pandemic-related issues, it remains worthwhile to pay attention to internal compliance issues that can easily go unnoticed. The specialists urge firms to review and refresh internal reporting mechanisms, make sure employees are trained and have access to internal reporting systems. They also urge firms to develop and maintain “the resources and institutional expertise necessary to respond to all such reports in a timely, well-documented and appropriate manner that preserves the anonymity, if requested, of anyone making such reports, including by adjusting internal controls, changing internal audit scopes and priorities, or providing additional training.”