Whistleblower protections expanded
Tucked into the recently enacted federal financial reform bill are provisions expanding protections for whistleblowers (Dodd-Frank Wall Street Reform and Consumer Protection Act, H.R. 4173, signed July 21, 2010). Among other things, the new law:
- Broadens whistleblower protection to cover employees whose jobs relate to consumer financial products or services, such as servicing loans, cashing checks, or collecting consumer debts (Section 1057).
- Allows individuals who provide original information to the Securities Exchange Commission (SEC) that results in monetary sanctions against publicly traded employers, to claim between 10 and 30 percent of any sanction over $1 million (Section 922).
- Allows an employee of a publicly traded company to go straight to federal court (instead of starting with the Department of Labor) if the employer retaliates against the employee for providing information to the SEC or making required disclosures under the Sarbanes-Oxley (SOX) Act (Section 922).
- Clarifies that employees of subsidiaries of publicly traded companies are protected by SOX (Section 929A).
The whistleblower protections will become effective sometime within the next six to twelve months, with the specific date to be announced in the Federal Register. If youre unsure whether the new law applies to your company, contact your Vigilant staff representative.
This website presents general information in nontechnical language. This information is not legal advice. Before applying this information to a specific management decision, consult legal counsel.