On September 14, 2016, Andrew Ceresney, the director of the SEC’s Division of Enforcement, spoke at the Taxpayers Against Fraud Conference and described the “transformative impact” that the whistleblower program has had on the SEC. Noting that more than $107 million has been paid to more than 30 whistleblowers, Ceresney said the impact of the whistleblower program has been shown in terms of the detection of illegal conduct and in moving the SEC’s investigations forward more quickly and efficiently. Ceresney noted that there are 18 dedicated staff attorneys, paralegals, and support staff responsible for the initial review and intake of whistleblower tips. The Whistleblower Office has received more than 14,000 tips from whistleblowers from every state in the union and from more than 95 foreign countries.

Ceresney noted that the SEC has found whistleblower assistance particularly valuable in certain types of cases, including issuer reporting and disclosure, offering frauds and Ponzi schemes, and the Foreign Corrupt Practices Act (FCPA). Ceresney also touted the SEC’s position that whistleblowers may receive awards by reporting misconduct internally rather than to the SEC. Ceresney described how awards have been made to compliance and internal audit personnel in situations after information was reported to the SEC and in situations in which there was a reasonable basis to believe that disclosure to the SEC was necessary to prevent imminent misconduct from causing substantial harm to the company or investors. He also noted that industry experts and other company outsiders had provided valuable information to the SEC. Ceresney observed that two recent multi-million-dollar awards were made to whistleblowers whose tips did not initiate an investigation, but rather aided an ongoing investigation. Ceresney also said that the SEC welcomes the involvement of counsel to whistleblowers, who can help the SEC triage tips that have a nexus to the federal securities laws and work with the whistleblowers to help advance SEC investigations.

Finally, Ceresney stressed that the SEC encourages whistleblowers to provide corroborating information, including documents or the names of other individuals who can provide information. He noted, however, that whistleblowers should not provide information protected by attorney-client privilege or work product doctrine because such information can delay investigations. He recommended that, if whistleblowers and their lawyers are not sure if information is privileged, they should segregate the information and discuss with the SEC staff how to proceed.