What Jobs Drive Whistleblower Tips to the SEC?
At least one of the top three may surprise you.
The Securities and Exchange Commission asks whistleblowers to provide information about their occupation when they submit a tip to the agency. Since 2011, when they launched the Office of the Whistleblower, more than 6500 people have filled out the form in the hopes of putting a stop to fraud and earning a reward.
The Wall Street Journal submitted a Freedom of Information Act request and gained access to the list of 3,600 job titles listed by whistleblowers. They published an article about the results on Monday.
In third place, and one that we wouldn’t have guessed, were engineers. 138 have submitted tips about violations. In the article, a representative of the American Society for Engineering Education ascribed this to the code of ethics among engineers.
Practically, it may have more to do with the financial markets dependence on complex computer systems these days. Engineers are programming the systems used by financial institutions and the algorithms used by traders. If they are knowledgable about the rules, then they will know when the instructions they are given to program into the system don’t comply with the regulations.
Coming in second, submitting 290 tips, were investors. This should not come as a shock. A significant number of the enforcement actions pursued by the agency take aim at companies and individuals defrauding investors. Investors can run into an assortment of violations of the rules, from the illegal marketing of securities to misappropriated investor funds.
Occupying the top spot are the 365 tips submitted by retirees. There are two reasons this group is on the list. Ex-employees are more easily able to provide information about their former employer without worrying about the potential for retaliation. Retirees, specifically, do not have to worry about the potential impact on their career if their name becomes public.
The other reason is that retirees are frequently the target and victim of fraudulent enterprises. Like investors, if you regularly have people approach you asking for money, you are more likely to encounter a violation of the securities laws and regulations.
Also interesting are the professions that were not reported by the Wall Street Journal. These include some of the jobs that have been the most controversial for the program, including attorneys, compliance professionals and accountants. Traders were also not mentioned.
It’s possible that these individuals simply did not list their job title. Only 3,600 of the more than 6,500 people who have submitted tips did so. On the other hand, it may be that many in these professions are still hesitant to blow the whistle when they encounter misconduct.