Greg Keating Discusses Key Takeaways from a Recent SEC Whistleblower Award

The FCPA Compliance and Ethics Report

Gregory (Greg) Keating, Member of the Firm in the Employment, Labor & Workforce Management practice, in the firm’s Boston office, discusses the key takeaways from a recent SEC whistleblowing award for the compliance professional in The FCPA Compliance and Ethics Report.

Following is an excerpt:

Last week a major Securities and Exchange Commission (SEC) whistleblower award of $28 million was announced (SEC Award). …

What are the key takeaways from this SEC Award for the compliance professional? I recently interviewed Greg Keating, partner at Epstein Becker & Green PC, and well-known whistleblower defense-side lawyer for an upcoming episode of the FCPA Compliance Report. Keating said that a key lesson from the SEC whistleblower award program is for companies to be proactive when a report comes in through a whistleblower line or other means. Companies must take such reporting seriously, triage the claim and then investigate it. If there is merit to the report, the condition must be remediated and, if severe enough, reported to the appropriate authorities.

The SEC Award also demonstrates the need to take findings of internal audits seriously as the information which led to the award did not come from [an] … employee. As early as two years … [the] internal audit department flagged that service providers were (1) hired without following procurement department processes; (2) contracted with no oversight; and (3) paid without delivering anything tangible to [organization]. The initial internal audit report stated, “consultant payments should be carefully reviewed in light of FCPA regulation [sic] due to lack of clarity in deliverables” and was circulated to … senior management.