August 6, 2014

SEC Awards Bounty to Whistleblower Who Went to Company First

Recently, the SEC announced the payment of a $400,000 award to a whistleblower that went to the SEC to report a fraud after the subject company failed to address the whistleblower’s concerns.  In the announcement, the SEC stated that “[t]he whistleblower had tried on several occasions and through several mechanisms to have the matter addressed internally at the company.”  When it became clear to the whistleblower that the company would not address the concerns raised, the next stop was the SEC. The SEC’s announcement did not provide any details regarding the nature of the problem or the circumstances of the whistleblower’s complaint.

It is somewhat hard to believe that this type of situation still arises with all of the procedures set up in the post-Sarbanes-Oxley era to avoid the problem of a whistleblower not being heard by the appropriate people and necessary action being taken by the company.  In retrospect, the company might have been wise to take the whistleblower’s concerns more seriously – if they had, the chances of an SEC enforcement action might have been more remote.

NIRI’s New Earnings Call Survey

In this Davis Polk blog, Ning Chiu discusses the highlights from a recent NIRI survey concerning earnings call practices. The full survey results are available only to NIRI members, but the highlights indicate that earnings calls are widely embraced by companies and mostly done on a quarterly basis, with three-quarters of the respondents indicating that the calls take place the same day the company issues its earnings release. The majority of companies that were surveyed held calls that lasted between 46 and 60 minutes. In terms of announcing the calls, practices vary, with 25% of the respondents indicating that they announce the call as early as a month in advance, while about 33% announce the call two to three weeks in advance, and another quarter announce only one to two weeks before the call.  The most popular day for earnings calls is Thursday, with almost half of the respondents indicating that they hold the calls during market hours. Not surprisingly, most of the companies responding to the NIRI survey (80%) did not use other media (i.e., Twitter) during the call.

Tough Love at Our Pair of Conferences

Have you ever wanted to throw a panelist off of a panel?  I suspect the thought may have crossed the minds of many who have seen me on a panel in the past.  At our just-announced plenary session – “Top Compensation Consultants: Survivor Edition” – you will have plenty of opportunity to jettison panelists as the panel goes on!

It’s Vegas – so let’s have a little bit of fun during “Tackling Your 2015 Proxy Disclosure & 11th Annual Executive Compensation Conferences” – to be held September 29-30th in Las Vegas and via Live Nationwide Video Webcast on Register now!

– Dave Lynn