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Articles Tagged with Dodd-Frank Act

Even with political clouds of uncertainty from the Trump administration, the head of U.S Securities and Exchange Commission is moving the agency full speed ahead, all the while chastising companies that retaliate or discourage their employees from blowing the whistle on possible securities violations.

Last month, Jane Norberg; the current chief of the SEC’s Office of the Whistleblower spoke on a panel at the Practising Law Institute on Corporate Whistleblowing. During the panel, she told attendees that they could expect the same level of enforcement and investigation as in years past.

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The SEC recently declined to pay a whistleblower award to a claimant that sought the SEC’s review of its stance on payouts stemming from information provided prior to the Dodd-Frank Act’s enactment in 2010.

In an SEC Order, the claimant provided whistleblower information to the SEC in 2007, three years before the Dodd-Frank Act.  According to Rule 21F-4(b)(1)(iv), all whistleblower payouts must be based on information provided to the SEC after the enactment of the law on July 21, 2010.

The Commission relied upon a 2015 Second Circuit decision that sided with the SEC in its refusal to award a whistleblower bounty for information provided prior to 2010.  The Second Circuit held that the whistleblower was ineligible for an award because the tip was provided prior to the Dodd-Frank Act

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:

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