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News August 15, 2011 Issue

SEC’s Whistleblower Website Is Live

The SECís whistleblower website is up and running, with a direct link from the SECís home page. The website has an online form for the easy submission of information, and features a "Claim an Award" page.

The SEC posts every final judgment or order for monetary sanctions on the Claim an Award page that "by itself or together with other prior judgments or orders in the same action issued after July 21, 2010, results in sanctions exceeding $1 million."

The SEC posts all final actions where monetary sanctions exceed $1 million, whether or not whistleblower information was involved. Anyone wishing to claim a whistleblower award related to a noticed action then has 90 days to apply for the award, using the appropriately named Form WB-APP. Although whistleblower tips and other information can be submitted online, applications for an award must be mailed the old-fashioned way to the SECís headquarters in Washington DC.

The whistleblower website also features frequently asked questions about the program, everything from eligibility for an award to the meaning of terms such as the "voluntary" provision of "original" information, and factors the SEC considers in determining the amount of any award.

Incentives to internal reporting first.

The FAQs note that although internal reporting is not required to be considered for an award, whistleblowers may be eligible for an award for information reported internally first, provided that the whistleblower also reports the information to the SEC within 120 days of reporting it internally. "Under these circumstances, we will consider your place in line for determining whether your information is Ďoriginal informationí to be the date you reported it internally," says the FAQ.

In addition, if the company conducts an investigation and reports the results to the SEC, the whistleblower "will benefit from all the information the Companyís investigation turns up when we are considering whether you should receive an award and if so where the award should fall in the 10 percent to 30 percent range."

Also, under factors considered in determining the amount of any award, the SEC notes that an award may be reduced if the whistleblower interfered with the companyís internal compliance and reporting systems, for example, making false statements to a compliance department that hindered its efforts to investigate possible wrongdoing.

The SECís home page, just below the whistleblower link, also makes it easy to "Submit an Enforcement Tip" and to ask questions or report problems with an investment or investment professional.