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Section 924(d) of the Dodd-Frank Act requires the SEC’s Office of the Whistleblower to report annually to Congress on its activities, whistleblower complaints, and the response of the SEC to such complaints.  In addition, Exchange Act § 21F(g)(5) requires the SEC to submit an annual report to Congress that addresses certain specific topics. The first such report has been prepared and issued by the SEC’s Office of the Whistleblower.

Because the SEC final rules became effective August 12, 2011, only 7 weeks of whistleblower tip data is available for fiscal year 2011.  According to the report, 334 whistleblower tips were received from August 12, 2011 through September 30, 2011. The most common complaint categories were:

  • market manipulation (16.2%),
  • corporate disclosures and financial statements (15.3%), and
  • offering fraud (15.6%).

The SEC received whistleblower submissions from individuals in 37 states, as well as from several foreign countries, including China (10) and the United Kingdom (9).  Domestically, the most complaints were received from California (34), New York (24), Florida (19) and Texas (18).  One whistleblower complaint originated in our home state of Minnesota.

The report notes that as a result of the relatively recent launch of the program and the small sample size, it is too early to identify any specific trends or conclusions from the data collected to date.

Given the time period covered by the report and the recent initiation of the whistleblower program, the report notes that no applications for awards had yet been processed. Accordingly, the SEC did not pay any whistleblower awards during fiscal year 2011.

Check dodd-frank.com frequently for updates on the Dodd-Frank Act and other important securities law matters.

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