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13 March 2012

Whistleblowers give SEC tools to fight corporate crime

A whistle-blowing programme set up under the 2010 Dodd-Frank Law and run by the US Securities & Exchange Commission is proving successful in the ongoing fight against white collar crime, according to a report in London's Financial Times.

Lawyers have commented on the amount of employees who are coming forward with high quality audio recordings and important internal documents to prove accounting fraud, foreign bribery and market manipulation.

Lucrative programme

The programme may prove lucrative for these individuals, as 10-30 per cent of the amount recovered by the SEC may be available as a reward. Although no rewards have yet been granted, similar cases in the past have involved multi-million-dollar settlements.

Financial Fraud

Chief of the SEC’s whistleblower office, Sean McKessey, told the FT: ‘We’ve been very pleased with the percentage of whistleblower tips that have [signs] of reliability, either because they’re from somebody working at the company they’re complaining about or there’s a sufficient amount of specificity, or both.’
Jordan Thomas, who helped to draft the whistleblower rules, said: ‘Financial fraud is the most common violation that has been brought to me and they’ve all led to large public companies. In the past people with potential liability remained silent.’

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