FINRA Creates Office of the Whistleblower

The agency announced that it has established a new Office of the Whistleblower to expedite the review of high-risk tips by FINRA senior staff and ensure a rapid response for tips believed to have merit, according to a press release. The new office will be overseen by FINRA Senior Vice President Cameron Funkhouser.

“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 FINRA Interim CEO Stephen Luparello, who will soon be replaced by CEO Richard G. Ketchum (see “FINRA Names Ketchum as CEO’). “We want to encourage individuals with evidence of, or material information about, potentially illegal or unethical activity to come forward.’

Luparello said the 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. Tips warranting additional review and investigation will be subject to an expedited regulatory response, he said.

FINRA’s Office of the Whistleblower established a toll free phone number (1.866.96.FINRA) and Web page (www.finra.org/whistleblower) where individuals can send tips. FINRA said whistleblower tips that fall outside FINRA’s jurisdictional reach will be referred to the appropriate regulatory or law enforcement agencies.

FINRA also said that the whistleblower initiative will not replace its regular handling of thousands of routine regulatory tips and customer complaints.