Dodd-Frank Whistleblower Rule Adopted by SEC Discourages Internal Reporting


The Dodd-Frank Wall Street Reform and Consumer Protection Act, enacted on July 21, 2010, established a whistleblower incentive program requiring the Securities and Exchange commission to provide monetary awards to whistleblowers who come forward with information about the violation of federal securities laws, including violations of the Foreign Corrupt Practices Act (FCPA). The Act also prohibits employers from retaliating against those who provide information about securities violations.

The reward for providing information that leads to a successful enforcement action by the SEC which results in monetary sanctions over $1,000,000 can be 10% to 30% of the penalty paid. Continue reading

Whistleblower Provisions Under Dodd-Frank


There has been lots of chatter about the whistleblower provisions under Dodd-Frank. A whistleblower  can earn 10% to 30% of any penalty the federal government imposes against a company. And companies have to be very careful, because there are anti-retaliation provisions in the legislation too.

One problem with this legislation that I hadn’t thought about is the impact it could have on employees using fraud hotlines. One of the most common ways that fraud is detected within companies is via tips from employees, vendors, or customers. An anonymous hotline helps encourage the reporting of these tips. Continue reading