New Whistleblower Rule Is Passed
The Securities and Exchange Commission (SEC) has passed the newly crafted whistleblower rule, which will allow the whistleblower to bypass having to report securities law violations to their employers first, according to a report in Investment News. This will allow employees to go straight to the SEC with violations without reporting them to their employer and still be able to collect the monetary award allowed by the Dodd Frank reform act.
Mary Schapiro, the SEC Chairman, said that “incentivizing, rather than requiring, internal reporting is more likely to encourage a strong internal compliance culture.” According to a report in the Washington Post, whistleblowers could receive as much as 10% to 30% of amounts over $1 million collected by the SEC in an investigation. With the risk of losing their jobs, destroying their lives, being sued and incurring huge legal expenses fighting litigation, whistleblowers must have the reward system incentives and the anti-retaliation provisions in order to encourage reporting wrongdoings, according to advocates.