The Dodd-Frank Act enacted in July 2010 contained whistleblower provisions applicable to all securities law violations including those under the Foreign Corrupt Practices Act.
In this prior post from July 2010, I predicted that the whistleblower provisions would have a negligible impact on FCPA enforcement. As noted in this prior post, my prediction was an outlier (so it seemed) compared to the flurry of law firm client alerts that predicted that the whistleblower provisions would have a significant impact on FCPA enforcement. Many FCPA Inc. participants seemed so eager for a marketing opportunity to sell compliance services, that some even called the generic whistleblower provision the FCPA’s “new” whistleblower provisions.
Whatever your initial view on how the whistleblower provisions may impact FCPA enforcement, it was previously noted that the best part of the whistleblower provisions was that its impact on FCPA enforcement could be monitored and analyzed because the SEC is required to submit annual reports to Congress.
Recently, the SEC released (here) its annual report for FY2017 and, like the prior six years, FCPA “tips” continue to be a minor component of the SEC’s whistleblower program.
Specifically, according to the SEC’s report, of the 4,484 whistleblower tips received by the SEC in FY2017, 210 (4.7%) related to the FCPA.
As noted in this similar post from last year, of the 4,218 whistleblower tips received by the SEC in FY2016, 5.6% (238) related to the FCPA. As noted in this similar post from two years ago, of the 3,923 whistleblower tips received by the SEC in FY2015, 4.7% (186) related to the FCPA. As noted in this similar post from three years ago, of the 3,620 whistleblower tips received by the SEC in FY2014, 4.4% (159) related to the FCPA. As noted in this similar post from four years ago, of the 3,238 whistleblower tips received by the SEC in FY2013, 4.6% (149) related to the FCPA. As noted in this similar post from five years ago, of the 3,001 whistleblower tips received by the SEC in FY2012, 3.8% (115) related to the FCPA. In FY2011 (a partial reporting year) of the 334 whistleblower tips received by the SEC, 3.9% (13) related to the FCPA.
Since the program began, the SEC has received 22,818 tips and 4.7% (1,070) related to the FCPA.
Another interesting figure to note is that the 1,070 FCPA tips have yielded perhaps only 1 whistleblower bounty paid in connection with an FCPA enforcement action. This represents a paltry .1% yield. Stated differently 99.9% of FCPA “tips” received by the SEC have not, it appears, yielded a whistleblower bounty.
The above paragraph uses the term “perhaps” because, as highlighted in this prior post, an Australian media report regarding the BHP Billiton enforcement action is the only information in the public domain suggesting that a whistleblower bounty has been paid in connection with an FCPA enforcement action. However, as highlighted in the post, the report is questionable given that the SEC’s investigation of BHP Billiton began in 2009 – a year prior to the whistleblower provisions being enacted into law. If anyone has information about a whistleblower bounty being paid in connection with an FCPA enforcement actions, and is able to share this information, please e-mail me at fcpaprofessor@gmail.com.
Regardless, I stand by my prediction, now 7.5 years old, that Dodd-Frank’s whistleblower provisions will have a negligible impact on FCPA enforcement.
Indeed, it is no longer a prediction but a fact.
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