Emloyment Law Group - Law Firms - Whistleblower Lawyers
Live Chat Contact Us 24/7 Email US
Contact Us: Live Chat, Call, Email Chat email
Our Clients in Their
Own Words
Play Video: Whistleblower Attorney Testimonials | Wendell Carter
Previous Video
Next Video
THE EMPLOYMENT LAW GROUP®

Toll Free: 1-888-826-5260
Fax: 202-261-2835

inquiry@employmentlawgroup.com

Employment Law Group Addresses
The Employment Law Group,PC. BBB Business Review

Whistleblower Law Blog

SEC Adopts Favorable Rules for Whistleblowers

Share

The Securities and Exchange Commission is being praised by whistleblower advocates for issuing finalized rules that will effectively incentivize employees to disclose fraud and other securities law violations.  The Dodd-Frank Act – enacted in July of 2010 – established a new whistleblower program within the SEC, requiring the SEC to reward whistleblowers who provide original information with between 10% and 30% of the amount recovered by the SEC.

The rules do not require whistleblowers to report fraudulent or illegal activity internally to their employer as a prerequisite to eligibility for an award – a position advocated by many corporations – but instead allow whistleblowers to blow the whistle directly to the SEC.  Allowing employees to report information directly to the SEC will not diminish the strong incentive for employees to blow the whistle internally because employees can still be rewarded for reporting internally so long as the employee also provides the same information to the SEC within 120 days.

The SEC wisely chose not to require all employees to report fraud internally.  Internal compliance programs failed miserably to avert the financial crisis.  Where fraud is pervasive in upper management, it would be futile for an employee to blow the whistle internally, and it is in the best interest of shareholders for the whistleblower to disclose fraud directly to the SEC.  But where companies have implemented effective programs that are not merely a tool of management to cover-up violations, employees will want to use those internal compliance programs.

For more information on reporting fraud, click here.

Related articles

Tagged: , , ,

decorative line
greybar
blueline
facebook logo twitter logo google plus logo
Home  |  What We Do  |  Our Team  |  Our Clients  |  In The News  |  Resources  |  Contact Us


Our Locations: Washington, D.C. | San Francisco | Los Angeles

© 2017 The Employment Law Group, P.C. - All rights reserved.
Disclaimer | Terms of Use | Privacy Policy