Caution: Having A Deficient Whistleblowing And Compliance System May Have Consequences

The SEC announced two whistleblowing cases in April 2015. In the first case, the SEC issued a whistleblowing award between USD 1.4 and 1.6 million. The whistleblower, a compliance professional, had assisted the SEC in an investigation which led to enforcement action. Allegedly, management at the whistleblower's company – which was not named – was aware of potential misconduct but did not take any steps to prevent it. In light of his position as a compliance manager, the whistleblower believed that reporting to the SEC was necessary to prevent financial harm to investors and the company. In the second case, a company (KBR) had allegedly used language in confidentiality statements that could stifle whistleblower activity.