Fewer opportunities seen for foreign whistleblowers

Initial expectations that the Dodd-Frank whistleblower bounty programme would have broad reach have been tempered by Securities and Exchange Commission (SEC) rule making and recent court cases.

While current whistleblower data are too scarce to draw meaningful conclusions about trends, legal developments suggest that would-be foreign whistleblowers face a host of impediments to collecting a bounty, which may reduce the number of foreign tips received by the SEC.

Thus far, approximately 10 percent of SEC whistleblower activity in 2011 and 2012 has come from abroad. For both years, by far the largest number of foreign tips came from the UK and China. In terms of subject matter, the single biggest category of tips involved claims of financial reporting misconduct. Whether foreign based tips will continue to comprise 10 percent of the total may turn in part on the ability of foreign whistleblowers to actually collect bounties…

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