Dodd-Frank as a profit center


Despite the unknown future of Dodd-Frank at the highest level, one element – the whistleblower program – closed out 2016 with record year in “revenue.”

As last year drew to an end, the SEC issued its 2016 annual report on the Dodd-Frank Whistleblower Program to Congress, revealing that 2016 was a record year for the initiative. Since its roll-out in 2011, the program had paid over $111 million in awards to whistleblowers who have come forward with information of corporate fraud. The SEC has generated over $500 million in penalties.

It’s notable that the program has been on an upswing: The SEC awarded $57 million in fiscal year 2016 alone – more than in all prior fiscal years combined.

Now, in 2017, the investment industry shouldn’t expect much of a slowdown for the whistleblower program, as long as the program—and Dodd-Frank itself—remains untouched under Donald Trump.

“Cyber” + whistleblower = a new risk

A new, emerging area of whistleblower concern for issuers and investment firms is the company’s ability to protect itself – and its customers – against cybersecurity breaches… specifically, should the firm fail to have adequate control measures in place. This new area of risk is creating significant whistleblower opportunities for employees (in the IT group?) and may fall under the radar of corporate whistleblowing initiatives. Whistleblowing is not ONLY about fiscal shenanigans.  

hat2As “we the people” usher in our new administration – one with a different take on financial regulation that is expected to push for sweeping policy changes – and as the SEC undergoes a change in leadership, there is likely to be a period of uncertainty regarding regulatory and compliance issues.

Our SEC Reporting & Filing in the Trump Administration” webinar discussed this in detail: LISTEN HERE.

The whistleblower office at the SEC is expected to survive, however, and companies should prepare accordingly. While the program could change from its current form, outright repeal would likely require positive legislative action, including passage through both House and Senate, which is considered to be an uphill battle given the bipartisan support the whistleblower program currently enjoys.





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