Record Number of SEC Whistleblower Awards – RIAs Should Review Policies & Procedures

March 30, 2021

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The U.S. Securities and Exchange Commission (“SEC”) recently announced that during the first half of fiscal year 2021, the SEC has already exceeded previous fiscal year’s record for individual whistleblower awards.  Click here for the SEC’s press release.

Under the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Act”), the SEC created and maintains a whistleblower program that allows the SEC to reward an eligible whistleblower, who voluntarily provide the SEC with high-quality, original information about a violation of federal securities laws that leads to a successful enforcement action, by giving the whistleblower up to 30% of any recovery above $1 million (subject to a maximum award to a whistleblower of $5 million).  For more information, please click here to visit the SEC’s Office of the Whistleblower’s webpage.  The program also prohibits employers from retaliating against an employee who become whistleblower and provides the retaliated against employee with a private cause of action in the event that they are discharged or discriminated against by the employer in violation of the Act.

In light of this trend of employees submitting whistleblower reports both internally to the company and externally to the SEC, RIA Compliance Consultants recommends that an investment adviser firm (“RIA”) review its policies and procedures to address the proper handling of internal whistleblower complaints and ensure that the affiliation of a supervised person is not terminated in retaliation to a whistleblower complaint.

Related Resources

Whistleblowing – Sample Whistleblower Reporting Form

Whistleblowing – Whistleblower Complaint/Tracking Reporting Form

Related Posts

Bank of America Whistleblower Judgment Highlights the Need for Investment Advisers to Have Whistleblower Policies and Procedures in Place – 9/22/2011


Posted by Bryan Hill
Labels: SEC, Whistleblower