Whistle-blower tips to US SEC rise 8%


By Ken Tysiac

Tips to the US Securities and Exchange Commission (SEC) by whistle-blowers rose 8% in fiscal year 2013 over the previous fiscal year, according to an SEC report to Congress.

The SEC received 3,238 tips in FY 2013, compared with 3,001 tips in FY 2012, the first full year of the programme. The SEC’s fiscal year begins October 1st.

Among complaints attributed to a category the SEC is tracking, misconduct related to corporate disclosures and financials was most frequently alleged by whistle-blowers, with 557 reports, up slightly from 547 the previous year.

Whistle-blower reports alleging offering fraud rose the most, to 553 in FY 2013 from 465 in FY 2012. Allegations by whistle-blowers of manipulation also were frequent, jumping to 525 in FY 2013 from 457 in FY 2012.

The largest number of complaints – 764 in FY 2013 – were not attributed to a specific category.

Mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act, the whistle-blower programme awarded tipsters a total of $14.8 million in FY 2013. More than $14 million of that total was awarded to one whistle-blower whose information led to a substantial recovery of investor funds.

Whistle-blowers who voluntarily report original information that leads to a successful enforcement action resulting in monetary sanctions of more than $1 million can receive awards of 10% to 30% of the money collected.

Ken Tysiac (ktysiac@aicpa.org) is a CGMA Magazine senior editor.