* US SEC moves to improve how it handles enforcement tips
* FINRA creates whistleblower office
(Adds FINRA details)
WASHINGTON, March 5 The U.S. Securities and
Exchange Commission is taking steps to improve the way it
handles whistle-blower complaints and enforcement tips, the SEC
said on Thursday.
The SEC, under fire from lawmakers and investors for not
catching Bernard Madoff's alleged $50 billion fraud, is seeking
a more centralized process to identify leads for potential
enforcement action and high risk for compliance exams.
Currently, tips and complaints are funneled through several
different divisions and offices within the SEC's headquarters
in Washington, as well as the agency's 11 regional offices
across the United States.
With the help of a federally funded research and
development center called the Center for Enterprise
Modernization, the SEC will examine how it evaluates tips,
complaints and referrals.
"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," SEC Chairman Mary
Schapiro said in a statement.
U.S. broker-dealer watchdog, The Financial Industry
Regulatory Authority, also criticized for its role in the
Madoff case, announced on Thursday that it had created a
whistleblower office to expedite the review and handling of
FINRA, which supervises nearly 5,000 U.S. brokerages, said
the new whistleblower office will not replace the agency's
longstanding processes for handling thousands of routine
regulatory tips and customer complaints each year.
"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," said FINRA's interim chief
executive Stephen Luparello in a statement.
"Those tips warranting additional review and investigation
will be subject to an expedited regulatory response," he said.
(Reporting by Rachelle Younglai; Editing by Brian Moss,