Dodd-Frank Anti-Retaliation Provision May Lead to More Lawsuits That Raise Compliance Issues

Bloomberg Finance
7 minute read | February.20.2013

Much attention has been focused on the increasing role of whistleblowers in the government’s pursuit of financial fraud. Several federal statutes create bounty programs, allowing whistleblowers who bring fraud to the government’s attention to recover significant sums. The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (‘‘Dodd-Frank’’) is only the latest example. Dodd-Frank amended the Securities and Exchange Act of 1934 (‘‘Exchange Act’’) to create awards for whistleblowers who provide information relating to a violation of the securities laws to the SEC.1

The size of the awards under this section can be significant, with bounties ranging between 10 and 30 percent of (1) the SEC’s recovery in a judicial or administrative action brought by the SEC that results in monetary sanctions exceeding $1 million; and (2) recoveries of certain other government agencies in actions related to that SEC action.2 

© 2013 Bloomberg Finance LP. Originally published by Bloomberg Finance LP. Reprinted with permission. The opinions expressed are those of the authors.