Bonus Watch: Analytical Whistleblowers

If you, dear reader, happen to have noticed some strange goings-on at a company you cover for a bank or money manager or whatever, we have wonderful, lucrative news for you.

The U.S. Securities and Exchange Commission on Tuesday issued a joint $2.5 million award to two external analysts who flagged financial reporting abuses by Orthofix Medical Inc, the agency and the lawyers for the analysts said in separate statements…. “These analysts could have ignored their hunches and remained silent—like so many others on Wall Street,” said Thomas.

That’s right: If you see any financial funny stuff going on, don’t write a white paper or Sohn presentation about it. Instead, call Jay Clayton and wait patiently. Indeed, you may find yourself even more motivated to do so now that Clayton’s last-minute deregulatory push has run into a couple of roadblocks, one of which will be particularly interesting to you and to Bill Ackman.

The U.S. Securities and Exchange Commission has called off a second attempt to vote on long-pending amendments to its whistleblower award program—a sign the agency’s commissioners still haven’t reached a consensus on a final version of the rules…. Whistleblower advocates have…. mounted a vocal opposition to [an] amendment… that would allow the SEC to downsize awards for information that leads to fines of $100 million or more, simply because of their size. The amendment would disincentivize the highest-paid Wall Street insiders from providing information, whistleblower lawyers have said.

Even one rule loosening thought to be done and dusted isn’t safe, which does not bode well for those hoping not to have to fill out 13-F filings anymore.

The New York Stock Exchange’s plan to let companies raise capital through direct listings is on pause…. The Council of Institutional Investors… raised concern that the NYSE’s plan would let companies circumvent protections built into the initial public offering process, ultimately harming investors…. The SEC notified the NYSE in a letter posted on the agency’s website that its approval of the NYSE’s plan had been stayed until further notice.

Oh well, SECers: Back to keeping yourself busy in other politically-convenient ways.

GSX Techedu Inc., a Chinese after-school tutoring company, said it is being investigated by the U.S. Securities and Exchange Commission after short sellers accused the Beijing-based firm of inflating its sales…. Five short-selling firms published multiple reports on GSX between February and July, according to data from Breakout Point, which tracks short-selling activities. They accused GSX of inflating its sales and operational data, and claimed many of the company’s users were fake.

U.S. SEC awards $2.5 million to Orthofix Medical’s external whistleblowers [Reuters]
SEC Cancels Vote on Controversial Whistleblower Program Reforms [WSJ]
NYSE Direct Listings Hit Snag as Investor Group Raises Concerns [WSJ]
SEC Probes China’s GSX Techedu After Short Sellers’ Pleas [WSJ]

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