SEC Issues Final Rules for Whistleblower Program under Dodd-Frank Act


On May 25, the Securities and Exchange Commission issued final rules creating a whistleblower program under Section 21F of the Securities Exchange Act of 1934 as required by Section 922 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The new program authorizes the SEC to pay rewards to individuals who voluntarily provide the SEC with original information that leads to successful SEC enforcement actions that result in monetary sanctions totaling more than $1 million. The total amount of the award is between 10% and 30% of the monetary sanctions.

An individual is deemed to have voluntarily provided original information to the SEC if such individual has provided the information before the government, a self-regulatory organization or the Public Company Accounting Oversight Board requests it from the whistleblower. Information will be considered "original" if it is based upon the whistleblower's "independent knowledge" or "independent analysis," is not already known to the SEC from any other source, and is not derived exclusively from certain public sources. A whistleblower's voluntary provision of original information will be deemed to have led to a successful enforcement action if...

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