The SEC has been much more aggressive in policing a company's internal investigations.
There has been a direct causal relationship to the SEC's increased use of whistleblowers and its focus on a companies' use of internal investigations. We have seen that the SEC probably knows more about the matter before it begins its official inquiry or contacts the targeted company. That is why it is essential for companies to permit their counsel to investigate a matter as soon as possible prior to speaking with the SEC. Thus, the best defense to a regulatory investigation starts before it commences with a proper internal investigation. Companies are reminded that, finding out what went on and addressing it before the regulators do, will only enhance a positive response from said regulators.
Accordingly, despite the presence of whistleblowers, companies should not “throw the baby out with the bathwater,” that is, internal investigations are still critical and must be pursued in a robust manner.