When the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”) was enacted in July 2010, the act implemented numerous protections for investors and consumers. One of the indirect benefits was the implementation of whistleblower laws, which allows individuals to come forward and anonymously report securities violations.
The Dodd-Frank Act not only provided an avenue for whistleblowers to come forward, the act also implemented protections, anti-retaliation provisions, and other safeguards to ensure whistleblowers could come forward with no apprehension. Many of these protections are found in Section 21F, “Whistleblower Incentives and Protection,” of the Securities Exchange Act of 1934.
The purpose of Section 21F is to encourage whistleblowers to report possible securities violations by providing, among other things, financial incentives and various confidentiality agreements. Rule 21F-17 acts as a preemptive measure to prevent individuals and companies from hindering whistleblowers from coming forward. The provision specifically states: