December 2, 2014

The SEC’s 3rd Annual Whistleblower Report: 3600 Tips

A few weeks ago, the SEC’s Office of the Whistleblower published its 3rd annual report for its activities of for the past year. The highlights include:

– 3620 whistleblower during the 2014 fiscal year, an increase of 382 (11.8%) over 2013
– Been a total of 10,193 whistleblower reports since the program commenced toward the end of 2011 fiscal year
– Relatively few whistleblower bounty awards authorized, although the number of awards is slowly increasing.
– Total of 14 whistleblower awards, 9 during the 2014 fiscal year;
– SEC made more awards in the 2014 fiscal year than in all the other years of the program combined.
– 29% of the 14 awards have gone to non-U.S. whistleblowers
– Denied a total of 19 claims, with 12 taking place during 2014 fiscal year

We have been posting memos in our “Whistleblowers” Practice Area – also see this blog by Jill Radloff and Reuters article. And I can’t remember if I ever shared this blog by Jill entitled “Whistleblowers Fight Over SEC Award.” And then there’s this “Mentor Blog” that I just posted entitled “Bigger Penalties When Whistleblowers Involved”…

SEC Commissioners: “Bad Actor” Waiver Deadlock Partially Broken

A few months ago, I blogged about the latest in the drama among the SEC Commissioners in approving “bad actor” waivers as the SEC Commissioners were stuck in a 2-to-2 deadlock over the ability of BofA to continue certain activities with Chair White recused. As noted in this Reuters article – and this article – the SEC Commissioners granted a partial waiver (here’s the incoming request) last week that waives the majority of sanctions that begin when the settlement with Bank of America is entered into court – but the one area that wasn’t waived is BofA’s ability to issue securities without getting the approval of the SEC every time. See this Reuters article entitled “SEC’s Stein says Bank of America waiver policy is ‘breakthrough'”…

Update on the St. Petersburg Stock Exchange Scam

Last year, I blogged about companies receiving letters from the St. Petersburg (Russia) Stock Exchange stating that it is in the process of unilaterally listing the company’s securities. Here’s an update from Brian Breheny of Skadden (also see this memo for a list if impacted companies):

A number of companies have recently received a letter from the St. Petersburg Stock Exchange (Exchange) in Russia stating that it has decided to admit the company’s securities to public trading on the Exchange. These letters do not request a response from the company and note that the Exchange’s decision does not impose any obligations on the company. Many companies received a similar letter from the Exchange in 2013. Companies generally responded to those letters and requested that their securities not be admitted to trading on the Exchange. It is our understanding that, as a result, the Exchange did not proceed with the admissions.

In July 2014, there were a number of changes to the Russian securities markets laws that regulate the procedures for listing of foreign securities in Russia. These changes further facilitate the listing of securities by Russian stock exchanges without the consent of the issuing company. and relieve the issuers from certain Russian reporting and disclosure obligations by shifting the burden of compliance onto the relevant exchange. Because of these changes, we expect that the Exchange will not be amenable to ceasing the admission of foreign securities to trading.

– Broc Romanek