Phillips & Cohen attorney and former Chief of the SEC Office of the Whistleblower Sean McKessy discusses the increasingly important role that whistleblowers play in enforcing US securities law in an article he wrote for Financier Worldwide.
US securities enforcement efforts around the globe have been strengthened in a major way in the past eight years, and corporations worldwide are feeling the impact.
The biggest boost came from the US Securities and Exchange Commission (SEC) whistleblower programme, which has attracted more than 22,400 reports of corporate wrongdoing from individuals, including over 2600 from countries outside the US.
Since the programme was created by the US Dodd-Frank Act in 2010, the SEC has ordered more than $1.5bn in sanctions as a result of whistleblowers and paid more than $266m in rewards to individuals for their information and assistance. This includes the largest SEC whistleblower award ever made to an individual outside the US, more than $32m, which went to an anonymous whistleblower in 2014.
The SEC, working with the US Department of Justice (DOJ), regularly exercises US extraterritorial rights to enforce US laws abroad when the offending companies fall under US jurisdiction, and corporate whistleblowers often provide solid information that underpins those actions.
The US law that often ensnares multinational corporations is the country’s powerful anti-bribery statute, the Foreign Corrupt Practices Act (FCPA). By providing insider information to the SEC, whistleblowers have strengthened enforcement of that law.