- within Consumer Protection, Insolvency/Bankruptcy/Re-Structuring and Insurance topic(s)
Section 922 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act"), which amended the Securities Exchange Act of 1934 (the "Exchange Act") to add Section 21F, established a series of new incentives and protections for individuals to report possible violations of the federal securities laws. Generally speaking, these incentives and protections take three forms: monetary awards for providing information, heightened confidentiality assurances and enhanced employment retaliation protections. In response to a disagreement among courts as to the scope of the whistleblower anti-retaliation protections, in August 2015, the US Securities and Exchange Commission ("SEC") issued an interpretation clarifying that an individual's status as a whistleblower for purposes of the anti-retaliation protections does not depend on whether the individual has reported the alleged misconduct to the SEC. The interpretive release reasons that this definition of "whistleblower" best comports with the SEC's overall goals in implementing the whistleblower program under Section 922 of the Dodd-Frank Act. Specifically, by providing employment retaliation protections for individuals who report internally first to a supervisor, compliance official or other person working for the company that has authority to investigate, discover or terminate misconduct, the SEC's interpretation avoids a two-tiered structure of employment retaliation protection that might discourage some individuals from first reporting internally in appropriate circumstances and, thus, jeopardise the investor-protection and law-enforcement benefits that can result from internal reporting.
The SEC's interpretive release is available at: http://www.sec.gov/rules/interp/2015/34-75592.pdf
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
