In the past year, the Securities and Exchange Commission (SEC) received over 3,000 whistleblower tips, according to the SEC’s 2012 “Annual Report on the Dodd-Frank Whistleblower Program” released this week.
That is an astonishing number of tips and shows how successful the two-year-old SEC whistleblower program is. The annual total averages out to roughly 12 tips each business day.
“In just its first year, the whistleblower program already has proven to be a valuable tool in helping us ferret out financial fraud,” said SEC Chairman Mary L. Schapiro in a press release. “When insiders provide us with high-quality road maps of fraudulent wrongdoing, it reduces the length of time we spend investigating and saves the agency substantial resources.”
Whistleblower tips to the SEC came from all 50 states and from 49 countries. California was the U.S. state where the most tips originated (435). New York followed closely with 246. The top four outside countries with the most tips were the United Kingdom (74), Canada (46), India (33) and China (27).
The most common complaints were related to corporate disclosures and financials (18.2 percent), offering fraud (15.5 percent) and manipulation (15.2 percent).
The SEC whistleblower program was created under the Dodd-Frank Act in 2010. If the SEC and other government authorities recover more than $1 million based on the whistleblower’s information, the whistleblower is entitled to 10 percent to 30 percent of the recoveries.