The High Price of Secrets: The Whistleblower Revolution

Why the SEC Whistleblower Program Works

March 20, 2020 Content has been updated

In a recent piece on the FCPA Blog, I discuss how the SEC Whistleblower Program is revolutionizing the securities industry. The evidence is apparent in recent enforcement actions, such as a landmark case against JPMorgan announced just last month. The action, in which our client tipped the SEC to the misconduct, resulted in a $267 million settlement by two of the bank’s wealth management subsidiaries, admission of wrongdoing, and another $40 million fine paid to the CFTC in a parallel proceeding.

What’s more, this revolution is just beginning. And the good guys are winning.

“As companies work hard to skirt transparency — our recent survey found that 25 percent of financial services professionals earning over $500,000 annually have signed or have been asked to sign an agreement that prohibits reporting potential illegal or unethical conduct to law enforcement — the SEC is fighting back. In April of last year, the agency announced its first enforcement action against a company for using improperly restrictive language in confidentiality agreements, which could stifle truthtellers.” – FCPA Blog, January 7, 2016

The implications are clear. The SEC Whistleblower Program is working, as we knew it would, encouraging the good guys to come forward and making serious headway against those who would commit fraud and try to hide wrongdoing. In fiscal 2015, the SEC received a record number of whistleblower tips — nearly 4,000 — and with high-value enforcement actions and whistleblower awards announced with more and more frequency, the whistleblower revolution is here, at long last.