On Aug. 12, 2011, the U.S. Securities and Exchange Commissions Office of the Whistleblower officially opened for business. The new whistleblower office is part of the Division of Enforcement and will handle whistleblower tips and complaints, provide guidance to enforcement staff, and assist the commission in determining the size of the awards received by whistleblowers.
The office is charged with implementing the recently adopted SEC whistleblower rules, which were mandated by Section 922 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Dodd-Frank overhauled the SECs whistleblower provisions, greatly expanding its power to reward whistleblowers and vesting it with enforcement authority over employers who wrongfully retaliate against whistleblowers.
Regulators and industry observers agree that the SECs whistleblower rules are likely to have a profound impact on enforcement activities. The SEC has estimated that it expects the new whistleblower office to receive thousands of credible whistleblower complaints each year. While the SEC may not have the resources to investigate every complaint, observers project a significant increase in whistleblower activity and expect that many complaints will result in full-blown SEC investigations. The projected increase in whistleblowing activity highlights the strong need for public companies and other regulated entities to respond quickly and comprehensively to whistleblower allegations.