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November 17, 2011

SEC report names most common whistleblower tips

Corporate disclosures and financial statements were two of the most common complaint categories of whistleblower tips submitted to the US’s Securities and Exchange Commission (SEC) the past 12 months.

An SEC report revealed the most common complaint category was market manipulation, which accounted for the 16% of all submissions against 16% of offering fraud and 15% of corporate disclosures.

The commission received 334 whistleblower tips in just seven weeks, between 12 August and 30 September.

China tops the list of countries that submitted whistleblower tips with 10 submissions, followed by the UK with nine tips, Australia with three tips while Spain and the Netherlands accounted for two reports each. Canada, Italy, Norway, Serbia, Turkey and Uruguay all only submitted one whistleblower notification.

The whistleblower programme was introduced last year under the Dodd-Frank Act which authorises, among other things, the SEC to pay awards to whistleblowers that voluntarily provide original information about violations of the federal securities laws to the SEC and it leads to a successful enforcement action resulting in monetary sanctions in excess of $1m. The awards can range from 10% to 30% of the sanctions recovered.

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