The Securities and Exchange Commission (SEC) is proclaiming improvements to its whistleblower program. Notwithstanding any improvements, the program continues to face a steep backlog as the number of tips to the Commission increases.
According to an audit by Inspector General, tipsters wait more than a year on average to finalize awards and amounts. According to Bloomberg Law, this actually is a significant improvement compared to the average wait of almost four years before late 2019.
In January 2022, the agency implemented a new program that reduces the time it takes to process awards after complete investigations. Before the new program, enforcement staff and the Office of the Whistleblower (OWB) loosely conferred on which individuals should get paid, with no set deadlines. Now, SEC investigative staff must quickly inform OWB about which tipsters provided the most information and are most worthy of being paid. Additionally, enforcement staff must fill out templates containing information on their investigation and the sources used.
The audit found that guidelines are only sometimes followed despite the new program. For example, according to the report, it took between 91 - 383 days for OWB to obtain seven draft declarations on claims the auditors reviewed. The audit also found that the agency needs help accurately tracking and recording critical data, particularly when manually entering information.
The Inspector General's audit report concluded that the OWB continues to risk inaccurate and incomplete reporting of claims tracking data and, in some cases, delays in key whistleblower program processes. But even if it's in baby steps, progress is still being made.
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