On July 21, 2010, President Barack Obama signed into federal law the Dodd-Frank Wall Street Reform and Consumer Protection Act. The Dodd-Frank Act promotes the financial stability of the United States by improving accountability, and transparency in the financial system, to end “too big to fail.” It protects the American taxpayer by ending bailouts, and to protect consumers from abusive financial services practices. Further, the Dodd-Frank Act made changes in the American financial regulatory environment that affect all federal financial regulatory agencies, and almost every part of the nation’s financial services industry.
In addition to establishing a new watch-dog agency, the whistleblower provisions in the Dodd-Frank Act rewards Whistleblowers by increasing transparency in disclosures, thereby strengthening the ability of regulators to uncover and prosecute fraudulent schemes. Whistleblowers will now have a broad range of options to pursue retaliation claims. The Dodd-Frank Act requires the Securities and Exchange Commission (SEC) to reward Whistleblowers who disclose original information regarding violations of securities law that result in monetary sanctions exceeding $1,000,000.00. The reward can range from between 10% and 30% of the amount recouped by the SEC. Further, employers are prohibited from retaliating against those Whistleblowers that do come forward. For the Whistleblower to be eligible for a reward under the Dodd-Frank program, the disclosure must relate to a violation of one or more securities laws, rules, or regulations. Importantly, the Dodd-Frank Act explicitly includes within the purview of the SEC any violations of the Sarbanes-Oxley Act (SOX) or Foreign Corrupt Practices Act (FCPA).
The non-retaliation provision of the Dodd-Frank Act protects Whistleblowers who report what they reasonably believe to be a possible securities law violation that has occurred, is occurring, or is about to occur. The SEC is permitted to enforce the anti-retaliation provisions by investigating and sanctioning employers who practice illegal retaliation should the SEC or the courts find an employer liable for retaliation, the prevailing Whistleblower can: