The Securities and Exchange Commission (SEC) said in its 2012 whistleblower report that it had received more than 3,000 tips, but as of yet has only made one payout.
However Labaton Sucharow partner Jordan Thomas said more rewards are expected in the years ahead. Thomas, who helped the SEC craft its whistleblower programme in 2011, said investigations often run past two years.
Tips related to the Foreign Corrupt Practices Act (FCPA), which is arguably the private equity industry's biggest source of risk with respect to whistleblowers, only represented 3.8 percent of all tips – well behind corporate disclosures and financials which were the most common type of tip reported (making up 18.2 percent of all tips). However, legal sources stress that anti-corruption enforcement efforts continue to be a strong priority for US regulators, meaning more tips related to the FCPA are expected in the time ahead.
Many private equity funds have historically only helped their portfolio companies with financial and operational issues, but are becoming more involved in corporate governance and compliance issues to ensure that they aren't stung by a whistleblower in one of their portfolio companies, according to legal sources.
At the firm level, lawyers have told PE Manager in the past that GPs should consider establishing their own whistleblower hotlines to provide employees and partners an avenue to air concerns before needing to report to the SEC.
If you do not receive this within five minutes, please try to sign in again. If the problem persists, please email: