Financial Enforcement Actions and the Role of Whistleblowers

In our recent paper, we investigate the association between employee whistleblowers and outcomes of financial misrepresentation enforcement actions by the Securities and Exchange Commission (SEC) and Department of Justice (DOJ).  We examine SEC and DOJ enforcement actions for financial misrepresentation since the passage of the Sarbanes-Oxley Act of 2002 and study whether whistleblower involvement in regulatory enforcement is related to more severe (1) financial penalties levied against misrepresentation firms, (2) monetary penalties assessed against executives associated with the misconduct, or (3) prison sentences of employee respondents. We also explore the relation between whistleblowers and penalties imposed on third‐party respondents (e.g., … Read more