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SEC Inspector General recommends improvements to its whistleblower program

By Phillips & Cohen LLP

The Securities & Exchange Commission has had a bounty program for whistleblowers in place since 1989, but has made only five payments for a total of $159,537.

A report from the SEC's Inspector General says that "the current SEC bounty program is not fundamentally well-designed to be successful."

The report, Assessment of the SEC?s Bounty Program, recommends that the agency engage in outreach to publicize the program; develop criteria for the awarding of bounties; institute procedures for tracking whistleblower tips; and incorporate best practices from the Dept. of Justice and Internal Revenue Service whistleblower programs.

The bounty program is limited to insider trading cases. The SEC recently sent to Congress proposed legislation to expand the authority of the program to permit bounties for any judicial or
administrative action brought by the Commission under the securities laws that result in monetary sanctions exceeding $1,000,000.

Full post as published by False Claims Act - Qui Tam on April 06, 2010 (boomark / email).