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U.S. Securities and Exchange Commission

SEC Revamping Process for Reviewing Whistleblower Complaints and Enforcement Tips


Washington, D.C., March 5, 2009 — Securities and Exchange Commission Chairman Mary L. Schapiro announced today that the agency is moving to improve the handling of whistleblower complaints and enforcement tips in order to better protect investors.

The SEC has enlisted the services of the Center for Enterprise Modernization, a federally funded research and development center operated by The MITRE Corporation, to begin immediately working with the SEC to conduct a comprehensive review of internal procedures used to evaluate tips, complaints, and referrals. The agency is seeking to establish a more centralized process that will more effectively identify valuable leads for potential enforcement action as well as areas of high risk for compliance examinations.

"As we continue to reinvigorate our enforcement efforts as an agency, it's vitally important that we move very aggressively to improve staff's use of tips and complaints from investors and whistleblowers," said Chairman Schapiro. "This comprehensive review will help us identify and improve areas within the agency where gaps or lack of communication may cause breakdowns that prevent us from ensuring swift and vigorous enforcement."

The SEC typically receives hundreds of thousands of tips and complaints per year from investors and the general public as well as from those the SEC regulates, including broker-dealers, investment advisers, and public companies. These communications come through a variety of means, including Web forms, e-mail, phone calls, mail, messengers, and faxes. Tips and complaints can come into several different divisions and offices within the SEC's Washington, D.C., headquarters, and each of the SEC's 11 regional offices around the country. The SEC also receives referrals from self-regulatory organizations (SROs), other government agencies, and foreign regulators.

The SEC's review will scrutinize the agency's processes for receiving, tracking, analyzing, and acting upon the tips, complaints, and referrals from these outside sources. The goal of the review is to improve the efficiency, effectiveness, and overall management of how the agency addresses tips, complaints, and referrals, and how SEC staff utilizes the information received to protect investors.

The Center for Enterprise Modernization of The MITRE Corporation will help the SEC identify ways to improve the quality and efficiency of the agency's current procedures, and to recommend potential technology solutions that can assist the SEC staff in more effectively managing and utilizing tips, complaints, and referrals. The MITRE Corporation (www.mitre.org) is a not-for-profit organization that provides systems engineering, research and development, and information technology support to the government.

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Modified: 03/04/2009