SEC Chair Wants Whistleblower Program to remain in Place

SEC Chair Mary Schapiro advised Dodd-Frank sponsor, Barney Frank, that the new SEC whistleblower program is yielding results and that no changes should be made to the program without further study of its effects.  In a letter to Frank, Schapiro contended that the SEC whistleblower program is providing “significant benefits. ”

Schapiro’s letter was written in response to efforts in the US House of Representatives to gut the whistleblower program by mandating internal compliance before going to the SEC.  Schapiro characterized internal compliance as having a chilling effect on reporting corporate wrongdoing, which will reduce the amount of tips received.  She also indicated that internal compliance would undermine the ability to report anonymously, which is an important consideration for whistleblowers.  She believes that the SEC’s program appropriately incentivizes whistleblowers to report internally if they choose.

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