Under Dodd-Frank, the SEC is required to pay monetary awards, between 10 and 30 percent of the total monetary sanctions collected by the SEC and in other related enforcement actions, to individuals who voluntarily provide the SEC with original information leading to an enforcement action in which the agency obtains at least $1 million in sanctions. The statute also provides robust employment protections that prohibit retaliation against an employee who provides information about possible securities violations to the SEC in accordance with the program’s implementing rules. In the event retaliatory action is taken, it establishes significant remedies including reinstatement with equivalent seniority, two-times back pay with interest, attorney fees, and other related expenses. Significantly, whistleblowers may report possible violations anonymously if represented by counsel. Attorneys are eligible to participate in this important investor protection program.
In a recent Corporate Counsel Magazine article, Professor Bruce Green, a nationally recognized ethics professor and the Director of the Louis Stein Center for Law and Ethics at Fordham Law School, and I explore the interplay between the SEC Whistleblower Program and attorney conduct rules, both state and federal.
David Callahan, the co-founder and Senior Fellow of the public policy group Demos, penned an informative blog post on the SEC’s latest arsenal in combating securities violations, the new Whistleblower provisions. The posts include two surveys whose findings demonstrate the huge potential of the new laws. There has been a positive and proactive response to the Whistleblower program, such as companies building internal mechanisms to protect and encourage whistleblowers. Also, Labaton Sucharow’s Whistleblower Representation Practice, which I proudly chair, is specially mentioned as one of the firms bringing the talents of private practitioners to represent corporate whistleblowers.
But more is still to be done. Educating the American public about the protection mechanisms built into the SEC Whistleblower program is still necessary and is one of the main reasons for the creation of the SEC Whistleblower Advocate online resource. It remains a tricky and complex terrain, but we are clearing the path, one step at a time.
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Website Editor &
Jordan A. Thomas
SEC Whistleblower Advocate
212-907-0836[ View Bio ]
- Anonymous Reporting
- Corporate Ethics & Compliance
- Corporate Fraud, Corruption & SEC Violations
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- Retaliation & Employment Issues
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