Securities & Exchange Commission (SEC) chairwoman Mary Schapiro speaking at the Society of American Business Writers and Editors’ conference on Monday announced that the SEC will ask Congress for “whistleblower authority” similar to that used by the IRS in investigating tax fraud. Three independent studies have found that whistleblowers are the most effective way to detect and deter fraud. It is about time that the SEC recognize the contributions of whistleblowers and help protect them.
Chairwoman Schapiro admitted that the whistleblower payment program the SEC already has for insider trading has not been used successfully. She also admitted that the SEC staff cannot manage the 750,000 to 1.5 million tips and complaints they receive each year. Chairwoman Schapiro stated that “we need to leverage third parties” to “help us focus on the [cases] where there’s the highest probability that there’s a really big problem that we can tackle.” A whistleblower rewards program is a step in the right direction for the SEC. In 2007, the rewards provisions in the federal False Claims Act helped recover over 2 billion taxpayer dollars from dishonest contractors. For more information on how whistleblowers help protect Americans from fraud please see the National Whistleblowers Center’s new Fighting Fraud page. Also, if you would like to get more involved in the fight to protect all federal employee whistleblowers please sign the petition.