Corporate and Securities Alert: FAQs re Dodd-Frank Whistleblower Rules


The 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”) added Section 21F to the Exchange Act, entitled “Securities Whistleblower Incentives and Protection.” This new section requires the SEC to pay awards to whistleblowers who provide the SEC with original information about a violation of the federal securities laws that leads to successful enforcement action and monetary sanctions in excess of $1 million. On May 25, 2011 the SEC adopted final rules to implement this Dodd-Frank mandate (“Whistleblower Rules”). The Whistleblower Rules define the conditions that must be met for whistleblowers to be eligible for an award. They include provisions to protect whistleblowers from retaliation, and encourage (but do not require) whistleblowers to utilize a company’s internal reporting system.

A whistleblower is an individual who voluntarily reports a possible violation of federal securities laws that has occurred, is ongoing or is about to occur. A whistleblower may be an employee of the company that is the subject of the report, but need not have any connection with the company at all.

Please see full alert below for more information.

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Published In: Administrative Agency Updates, Finance & Banking Updates, Labor & Employment Updates, Securities Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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