US- The Securities and Exchange Commission is reviewing the way it handles tips and whistleblowers after coming under fire for missing the alleged fraud committed by Bernard Madoff.
SEC chairman Mary Shapiro said: "This comprehensive review will help us identify and improve areas within the agency where gaps or lack of communication may cause breakdowns that prevent us from ensuring swift and vigorous enforcement."
Congressmen laid into the commission last month for failing to properly act on tips warning the SEC about the alleged US$50bn fraud at Madoff a decade ago.
According to an SEC release, the commission receives hundreds of thousands of tips a year coming into various SEC divisions.
Shapiro said: "As we continue to reinvigorate our enforcement efforts as an agency, it's vitally important that we move very aggressively to improve staff's use of tips and complaints from investors and whistleblowers."
Also yesterday, the Financial Industry Regulatory Authority announced it has developed an office of the whistleblower.
FINRA's interim chief executive said: "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. We want to encourage individuals with evidence of, or material information about, potentially illegal or unethical activity to come forward."
The new office will be overseen by FINRA senior vice president Cameron Funkhouser.
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