The Securities and Exchange Commission, Wall Street’s top regulator, pays a bounty to whistle blowers who report wrongdoing in the banking/securities industry. Recently, the SEC awarded $82 million to three tipsters who reported an elaborate scheme at Bank of America that involved misusing customer cash and securities.
The cash-for-tips program is now in its seventh year and has awarded more than $266 million, shared amongst 55 tipsters. But in case anyone reading this is seeing those dollar signs, the pay out time has reached over two years now for a whistleblower with meritorious information – primarily because there has been a recent increase in “unworthy applicants trying to finagle a windfall from the SEC” which pays whistleblowers who specifically provide tips deemed critical to an SEC investigation. In the early years of the program’s functioning, the SEC took about half a year to decide if the whistleblower’s information had merit; in recent years, that time has risen to four years in some cases. Typically, those who will receive a payout are notified in 210 days, on average, and those whose information is rejected often have to wait at least three times that long. The head of the SEC office that oversees the process reports that: “No application is cookie cutter for us to process. The volume of claims is evidence of the program’s success.” Yes – I’d guess that’s one way to look at it – from the positive side. On the other hand, it might be evidence of word getting around that there are windfalls to be had. Whichever way it is, the fact that the program has processed 55 reasonable claims is likely evidence that it is a worthwhile program to continue.
IN CASE YOU DIDN’T KNOW. . . Whistleblower