Dodd-Frank Act (2010)

Under the Dodd-Frank Act, “original information” must be derived from a whistleblower’s independent knowledge or analysis, not already known to the SEC, and not exclusively from a judicial hearing, government report, or news media. Independent knowledge means factual information in the whistleblower’s possession from business experiences or observations.

However, the SEC excludes information obtained through attorney-client privileged communications, by compliance or internal audit employees in their official roles, or by public accountants through required engagements.

Under the Dodd-Frank Act, a whistleblower must provide original information that leads to a successful SEC enforcement action with monetary sanctions exceeding $1 million.

Eligible whistleblowers are entitled to an award between 10% and 30% of the sanctions collected. The SEC has discretion to determine the exact percentage within this range based on factors including the significance of the information, the whistleblower’s assistance, and the government’s interest in deterrence.

Under Rule 21F-6, awards generally start with a presumption at the statutory maximum, which can be adjusted based on positive or negative factors.

The Dodd-Frank whistleblower program and the FCA’s qui tam provisions differ fundamentally in their enforcement mechanisms. While both reward whistleblowers, Dodd-Frank is an agency-centric program where whistleblowers report to the SEC, which then investigates and prosecutes. The FCA uses a court-centric qui tam model where whistleblowers file lawsuits on behalf of the government.

– Under Dodd-Frank, whistleblowers cannot file a lawsuit if the government declines to act
– FCA relators may pursue litigation independently if the government declines to intervene
– Dodd-Frank awards range from 10% to 30% of sanctions collected
– FCA awards range from 15% to 30% of the recovery

The Dodd-Frank Act’s anti-retaliation provision prohibits employers from discharging, demoting, suspending, threatening, or discriminating against a whistleblower for engaging in protected activity.

Protected activity includes providing information to the SEC or assisting in any SEC investigation or action.

For purposes of this protection, a “whistleblower” is defined as an individual who provides information relating to a securities law violation to the SEC. In Digital Realty Trust v. Somers (2018), the Supreme Court held that the anti-retaliation protections only apply to those who have actually reported to the SEC, not those who only report internally.

For Dodd-Frank retaliation claims, the statute of limitations is six years from the violation or three years from discovery, whichever is later. This allows whistleblowers to file directly in federal court without exhausting administrative remedies first.

By contrast, SOX whistleblowers must file an administrative complaint with the Department of Labor within just 180 days of the alleged retaliation. If the Secretary of Labor does not issue a final decision within 180 days, the complainant may then file in federal court.

– Dodd-Frank: 6 years from violation or 3 years from discovery, direct federal court access
– SOX: 180 days from retaliation, administrative complaint with DOL (Department of Labor) first

Yes, a whistleblower may submit information to the SEC anonymously under the Dodd-Frank Act.

However, the submission must be made through a retained attorney, who files the information on the whistleblower’s behalf. The SEC can keep the whistleblower’s identity confidential during the investigation.

To receive a monetary award, the whistleblower must eventually disclose their identity to the SEC for verification before any payment is made.

SEC Rule 21F-17(a) prohibits any action that impedes an individual from communicating directly with the SEC about a possible securities law violation. This includes enforcing or threatening to enforce a confidentiality agreement that would prevent such reporting.

– The rule does not require employees to report internally before going to the SEC
– It applies to confidentiality agreements, severance agreements, and internal policies that discourage whistleblowers
– Only the SEC can enforce this rule, and it has brought enforcement actions against companies for violations