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 its annual report for FY2018 and, like the prior seven years, FCPA “tips” continue to be a minor component of the SEC’s whistleblower program.
Specifically, according to the SEC’s report, of the 5,282 whistleblower tips received by the SEC in FY2018, 202 (3.8%) related to the FCPA. This percentage of FCPA “tips” vs. overall tips is the lowest in the history of the whistleblower program.
- As noted here, of the 4,484 tips received by the SEC in FY2017, 2010 (4.7%) related to the FCPA
- As noted here, of the 4,218 tips received by the SEC in FY2016, 5.6% (238) related to the FCPA.
- As noted here, of the 3,923 tips received by the SEC in FY2015, 4.7% (186) related to the FCPA.
- As noted here, of the 3,620 tips received by the SEC in FY2014, 4.4% (159) related to the FCPA.
- As noted here, of the 3,238 tips received by the SEC in FY2013, 4.6% (149) related to the FCPA.
- As noted here, of the 3,001 tips received by the SEC in FY2012, 3.8% (115) related to the FCPA.
- As noted here, in FY2011 (a partial reporting year) of the 334 tips received by the SEC, 3.9% (13) related to the FCPA.
Since the program began, the SEC has received 28,100 tips and 4.5% (1,272) have related to the FCPA.
Another interesting figure to note is that the 1,272 FCPA tips have yielded perhaps only 1 whistleblower bounty paid in connection with an FCPA enforcement action. This represents a paltry .07% yield. Stated differently, 99.93% 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.
Regardless, I stand by my prediction, now 8.5 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.
Strategies For Minimizing Risk Under The FCPA
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