Business Litigation Alert: "The Year of the Enforcer"

A Record Year for the SEC

The whistleblower provision of the Dodd-Frank Act went into effect this year, offering whistleblowers 10 to 30 percent of penalties over $1 million. Many predicted that there would be an increase in reporting in the wake of the implementation of this rule, and that prediction proved to be true.

  • In the first seven weeks of the whistleblower program, the SEC reported receiving over 334 tips, with a higher percentage of those tips being converted into investigations than the SEC has historically seen.
  • These whistleblower reports have resulted in 191 cases with sanctions in excess of $1 million.
  • The SEC report also indicates that the most common reporting was in the areas of market manipulation, offering fraud, and corporate disclosures and financial statements.

The SEC predicts that 2012 will bring with it another reporting record.

The “success” of the Whistleblower Program highlights the need for public companies to implement internal reporting programs. Doing so will give your employees an opportunity to go through their own company’s reporting channels before the whistle blows and the enforcers come calling. 

Jeff Elkin is a partner in the litigation section of Porter Hedges LLP.
He can be reached at 713.226.6617 or

This information is made available for educational purposes only and does not offer specific legal advice or create an attorney-client relationship with the Firm. Do not use this information as a substitute for specific legal advice. Attorney advertising

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