Whistleblower Law Blog

TELG Quoted by Investment News About Proposal to Weaken SEC Whistleblower Reward Program

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Investment News reported that Rep. Michael Grimm, R-N.Y. circulated draft legislation that would require a whistleblower to first report fraud through an internal compliance program as a prerequisite to recovering an award before the whistleblower would be eligible for a reward from the SEC under the whistleblower reward provision of the Dodd-Frank Act.  TELG opposes such a requirement because blowing the whistle in a company where fraud is pervasive or where the internal compliance function is not independent is not only futile, but can undermine the SEC’s ability to combat the fraud.  Indeed, TELG has found that many whistleblowers who come forward in good faith through an internal compliance program suffer retaliation.   Jason Zuckerman, a Principal atThe Employment Law Group® law firm, told Investment News that he hopes that the SEC’s final rules implementing the whistleblower reward provisions of Dodd-Frank will offer strong to whistleblowers, and notes that “In order to put your job on the line, there has to be a real financial incentive.”

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