On the same day that the U.S. Securities and Exchange Commission announced a review of its procedures for dealing with whistleblower tips, the Financial Industry Regulatory Authority announced that it has established a new Office of the Whistleblower to expedite the review of high-risk tips.

Some of FINRA’s most significant enforcement actions have resulted from investor complaints or anonymous or insider tips, it notes. “One of the important lessons learned from the recent scandals is the need for regulators to recognize and react to regulatory intelligence offered by whistleblowers,” said Stephen Luparello, FINRA’s interim CEO.

“We want to encourage individuals with evidence of, or material information about, potentially illegal or unethical activity to come forward. This new initiative will ensure that individuals with significant information will reach senior staff, who can quickly assess the level of risk involved and make sure that each tip is properly evaluated. Those tips warranting additional review and investigation will be subject to an expedited regulatory response,” Luparello added.

The new office, which will be overseen by FINRA senior vice president Cameron Funkhouser, will not replace the agency’s longstanding processes for handling routine tips and customer complaints. FINRA typically receives between 4,500 and 6,000 formal investor complaints annually.

IE