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High Volume of Tips to SEC Whistleblower Program

A K&L Gates client alert discusses recently released data on the SEC's new whistleblower program established pursuant to the Dodd-Frank Act.  The program makes whistleblowers eligible for rewards if their tips lead to sanctions of more than $1 million.  Whistleblowers provided 334 tips to the SEC during the first seven weeks that the new program was in operation. The considerable volume of tips received by the agency is the most significant data included in its recently-submitted first "Annual Report to Congress on the Dodd-Frank Whistleblower Program." While it remains too early to identify any specific trends, the data suggests that the program is working, and that there are likely to be significant consequences for companies that fail to implement effective internal reporting systems.