Insights From Jane Norberg on Whistleblowing and Compliance

Arnold & Porter’s Jane Norberg was recently featured on the “Great Women in Compliance” podcast. With her extensive experience as a former Chief of the Office of the Whistleblower at the Securities and Exchange Commission (SEC), Norberg discussed the SEC's whistleblower program, its impact on corporations, and the challenges that compliance programs face in the current work environment.

During Norberg’s tenure, the whistleblower program saw a significant expansion in both the number of tips received and the awards issued to whistleblowers. The program has evolved into an essential component of the SEC's enforcement efforts, with staff working closely with whistleblowers to bring about successful enforcement actions.

Key Takeaways:

• Record number of whistleblower tips: In 2022, the SEC received over 12,000 whistleblower tips, following a record-breaking year in 2021. This surge in reporting began around the time of COVID-19 lockdowns, raising questions about the effectiveness of internal reporting structures in remote work environments.
• Impact on corporations: Over the 12 years of the SEC whistleblower program, corporations and individuals have been fined over US$6.3 billion based on whistleblower information. This highlights the importance of robust compliance programs that can effectively address and investigate internal reports.
• Expansion of whistleblower impeding cases: The SEC rules prohibit any action that impedes someone from reporting a possible securities law violation to the commission. 16 cases were brought against companies for restrictive language in severance agreements, but this area is expanding.
• Employees prefer internal reporting: Workers favor to work within their company's internal reporting structures, which can prevent them from reporting to regulators if their concerns are adequately addressed.
• Management's role in handling complaints: A common gap exists in middle managers not recognizing or properly handling whistleblower tips, which can lead to employees seeking external avenues for reporting.
• Accessible reporting guidelines for managers: Offering easily accessible and straightforward reporting guidelines can empower managers to effectively address whistleblowing situations within the organization.
• Challenges for compliance programs: With remote and hybrid work becoming the new norm, compliance professionals must reassess their programs and ensure that they continue to encourage internal reporting and maintain a strong organizational culture.

Norberg emphasized the importance of companies fostering a culture that encourages employees to report concerns and potential misconduct. She also highlighted the need for organizations to evaluate their internal structures, ensuring that they are promoting open communication and reinforcing a tone from the top that values transparency.

Norberg's insights serve as a reminder that organizations should be proactive in adapting their strategies to promote a culture of transparency — even as workplaces continue to evolve. In today’s aggressive enforcement environment, companies need to be proactive and have appropriate mechanisms in place to identify and promptly investigate and correct any potential misconduct before it is reported to the SEC.

Arnold & Porter possesses a strong Whistleblower Risk Mitigation & Defense practice. Our Whistleblower Risk Mitigation & Defense team includes former SEC enforcement senior leaders, including Ms. Norberg, the former Chief of the SEC’s Whistleblower Office. The team assists clients with handling sensitive whistleblower issues, both internally and with defense of governmental claims.

© Arnold & Porter Kaye Scholer LLP 2023 All Rights Reserved. This blog post is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.