The New SEC Whistleblower Proposal: Make It Fair, Make It Pay, and They Will Come

By Dan Hurson – Senior Partner in the Hurson Law Firm, LLP.

Buried deep within the President’s historic new proposals to oversee and regulate the financial markets (“Financial Regulatory Reform, A New Foundation”) is the outline of a provision that garnered no headlines but might well become the most effective new anti-fraud regulation of all: rewarding whistleblowers who disclose fraud cases to the SEC. It is surely the only part of the massive proposal that gives insiders with knowledge of wrongdoing a chance to speak up against and even profit from the types of financial and securities fraud that has infected our financial markets in recent years.

This may be the beginning of the golden age of whistleblowing. Protecting them and making their jobs easier is getting increased attention in Congress. While federal qui tam actions initiated by whistleblowers who report fraud against the government have been around for many years, the concept of rewarding those who report on securities fraud (other than insider trading) is new, and revolutionary.

SEC Changes Proposed for New Approach to Criminal Enforcement, Mandatory Disclosure of Violations by Public Companies

By Daniel J. Hurson — Senior Partner in the Hurson Law Firm, LLP, and a former federal prosecutor and SEC enforcement trial lawyer

The SEC will survive, and emerge stronger, from the challenges it has faced recently. It has solid leadership and a highly professional staff. It needs to consider the various internal management reforms that have been suggested by various astute outside observers, including streamlining the enforcement process, reorganizing the top-heavy staff structure of the Enforcement Division, prioritizing its cases, and making sure the Commissioners themselves avoid any colossal mistakes or regulatory blunders which can open the doors to the next big financial debacle that no one today sees coming.

This observer, a former enforcement division trial lawyer who makes no claim to be an expert in the securities laws but perhaps has the detachment afforded one who saw the agency from the inside for awhile but was not there so long as to become a “career” SEC insider, here offers several “outside the box” suggestions which might help the SEC regain its footing as the top regulator of the financial markets.

Maintaining a Robust Ethics and Compliance Program in Today’s Business Climate: A Necessity to Minimize Your Organization’s Risks

By Jodie Fredericksen and Stephen Martin, Corpedia, Inc.

As the United States continues to muddle through the current recession, corporate executives have been faced with the challenge of finding areas in which to cut operational costs. As previously reported by Corporate Compliance Insights, even in a booming economy, compliance and ethics budgets are often unfairly scrutinized, due to the misperception that there is no return on the investment of compliance dollars.

While academics and political pundits disagree as to whether current economic conditions will cause an increase in ethical/legal misconduct or simply bring such behavior to light, recent repeated statements by government and regulatory personnel make it abundantly clear that now is not the time to cut your compliance budget.

David Becker Named SEC General Counsel and Senior Policy Director

David Becker has been named the new General Counsel and Senior Policy Director of the SEC. The appointment of David Becker was the first by new SEC Chairman Mary Schaprio.

Richard Ketchum Takes Over for Schapiro as Chief Executive of Finra

Richard Ketchum has been named the new chief executive of Finra, the Financial Industry Regulatory Authority, replacing former chief executive Mary Schapiro who is now the chairman of the SEC.

Should the SEC Adopt CIA-style Methods for Gathering Information?

A recent article at CFO.com by David Katz raises an interesting question regarding how far the SEC should go to improve its ability to gather information in its effort to provide tougher regulatory governance. Should the SEC adopt CIA-style methods to more effectively gather relevant intelligence on cases it is investigating?