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The bounties, as well as the SEC’s promise to protect whistleblowers from retaliation, could be attractive enough to hedge fund employees to make them overcome any skittishness about going to the agency, according to [law firm] partner Jordan Thomas, who chairs the firm’s whistleblower practice and previously served in a leadership role for the SEC in developing the whistleblower program.
“Historically, people in the financial services industry have remained silent and haven’t spoken up about problems they are seeing,” Thomas said. “With the SEC whistleblower program, people are breaking their silence. There’s a quiet revolution going on in securities enforcement.” That should come as a dire warning to hedge funds to quickly improve compliance with SEC rules, Thomas added.
“This would be an excellent time for responsible hedge funds to re-evaluate their internal reporting and compliance programs to ensure they are world class,” he said.
Still, 83 percent of respondents said they were aware of the whistleblower program, and even more said they were willing to take part — a welcome sign for the SEC, according to Thomas.
“If people weren’t willing to come forward before,” he said, “they will be now.”