The Securities and Exchange Commission’s whistleblower program issued its first payout last month, awarding $50,000 for information on a multimillion-dollar fraud.
When Sean McKessey, chief of the SEC’s Office of the Whistleblower, announced the award, he stated that the SEC has received an average of about eight solid tips per day since the program was established last year. The news is just the latest reminder that organizations need to ensure that their compliance hotlines are operating as intended and that they are effective. If employees don’t feel comfortable raising concerns through the normal chain of command, the internal hotline should serve as a constructive mechanism and last line of defense for companies to know what is happening before the SEC or other enforcement and regulatory bodies become involved.
