SEC: Number of whistleblowers goes up as companies allow employees to work from home


06/02/2020

A side effect of the coronavirus pandemic, which forced many companies to transfer employees to a remote mode of operation, send people on leave without pay or even get fired, was an increase in the number of requests to the Securities and Exchange Commission (SEC) for corporate violations.



Steven Depolo via flickr
According to Stephen Peikin, co-director of the SEC Legal Enforcement Division, from mid-March to mid-May, the regulator received almost four thousand messages regarding various violations, which is 35% more than a year earlier.

As a result, the SEC launched hundreds of new investigations, some of which are related to the COVID-19 coronavirus pandemic, while others relate to traditional violations, he said.

Lawyers say that many people who work from home and are outside the field of view of colleagues are less afraid of the possibility of exposing them as an SEC informant. The lack of the need to constantly interact with management also weakens the fears of informants that they will be revealed and subjected to reprisals. Even less doubt arises in people sent on vacation without pay or dismissed.

“People have more time at their disposal,” said Christopher Connors, attorney at the Chicago law firm Connors Law Group. “They don’t have to see the management and it gives them courage”.

source: wsj.com