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12 N.Y.U. J.L. & Bus. 215 (2015-2016)
An Empirical Analysis of SEC Enforcement Actions in Light of the Dodd-Frank Whistleblower Program

handle is hein.journals/nyujolbu12 and id is 219 raw text is: 






                     NEW YORK UNIVERSITY

       JOURNAL OF LAW & BUSINESS


VOLUME 12                     FALL 2015                      NUMBER 1




AN EMPIRICAL ANALYSIS OF SEC ENFORCEMENT
      ACTIONS IN LIGHT OF THE DODD-FRANK

                WHISTLEBLOWER PROGRAM


                        CAROLINE E. DAYrON*

         This Note examines the Securities and Exchange Commission's (SEC)
     enforcement decisions in light of the creation of the Office of the
     Whistleblower (OWB), which was enacted through the Dodd-Frank Wall
     Street Reform and Consumer Protection Act (Dodd-Frank). Specifically, this
     Note looks at whether the types of violations that are pursued by the SEC
     have changed after the creation of the OWB. In addition, it examines the
     change in the monetary sanctions for actions in which a whistleblower is
     likely to be present. After conducting an empirical analysis using data con-
     tained in the Securities Enforcement Empirical Database, Ifind support for
     the conclusions that (1) enforcement actions in which a whistleblower is
     likely to be present increased after the creation of the OWB in 2011 and
     (2) the median disgorgement and civil penalty amounts for actions in which
     a whistleblower is likely to be present have decreased as compared to enforce-
     ment actions in which a whistleblower is unlikely to be present. Lastly, this
     Note examines possible policy implications of the Dodd-Frank Whistleblower
     Program (DFWP) and how a reliance on tips from whistleblowers may affect
     enforcement policy going forwards. Although there is not enough data at this
     point to support a robust statistical analysis, I conclude that the evidence
     supports the conclusion that the SEC has changed its enforcement policy
     after the creation of the DFWP and continued monitoring should take place
     to determine the role the OWB plays in the SEC's enforcement strategy.


     * Copyright © 2015 by Caroline E. Dayton. J.D., 2015, New York Uni-
versity School of Law; B.S., 2010, University of Virginia. I would like to thank
Professor Stephen Choi for his thoughtful comments and guidance through-
out the development of this Note. I am particularly grateful to the Securities
Enforcement Empirical Database for assisting me with data on SEC enforce-
ment actions used here. In addition, I would also like to thank my fiance,
Nolan Pauker, for his help in the data analysis involved in this Note. I wish to
thank the 2015-2016 Board of Editors of the NYU Journal of Law & Business
for their time, efforts and advice. All errors are my own.

                                  215


Imaged with Permission of N.Y.U. Journal of Law & Business

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