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SEC Whistleblower Program
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In August and September 2011, TheCorporateCounsel.net surveyed the impact of the SEC Whistleblower Program and how companies are responding to the whistleblower provisions in the Dodd-Frank Wall Street Reform and Consumer Protection Act. Contrary to the significant concerns expressed by the corporate community during the legislative and regulatory process, more than a year after the enactment of Dodd-Frank, only 6% of respondents believed that fewer whistleblowers claims were reported internally as a result of the new program and 3% believed that more whistleblower claims were reported internally because of the program.
According to the survey results, almost 40% of respondents indicated that, in response to the SEC Whistleblower Program, their company had or was planning to change existing policies to address the new rules. This is a positive sign. Responsible organizations should regularly evaluate existing compliance policies and must take every step to ensure that internal reporting of misconduct is encouraged at every level. Nevertheless, a surprising 87% of respondents indicated that their organization hadn’t yet, were not sure that it would, or had decided not to create a system to alert employees of the benefits of reporting internally. For these organizations, the lack of such a system represents a fundamental compliance weakness and is likely to lead to a higher number of securities violations and increased external reporting.