SEC Adopts Final Whistleblower Bounty Rules Under Dodd-Frank.
Mondaq Business Briefing › Nbr. 2011, January 2011
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SEC Adopts Final Whistleblower Bounty Rules Under Dodd-Frank.
On May 25, 2011, the Securities and Exchange Commission (SEC) adopted final rules1 implementing the whistleblower provisions of new Section 21F of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), which was added to the Exchange Act by Section 922 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act"). The SEC proposed these rules on November 3, 20102 and adopted the rules with certain modifications and clarifications. Section 21F of the Exchange Act directs the SEC to pay awards, subject to certain limitations and conditions, to eligible whistleblowers who voluntarily provide the SEC with original information about a possible violation of the federal securities laws that leads to the successful enforcement of an action brought by the SEC resulting in monetary sanctions exceeding $1 million.
These rules are among the most controversial of the SEC's rulemaking to date under the Dodd-Frank Act, in part because many in the business community anticipated that the rules will prompt would-be whistleblowers to circumvent companies' internal whistleblowing procedures ...See the full content of this document
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