Dodd-Frank Violations

The Dodd-Frank Wall Street Reform and Consumer Protection Act provides incentives through whistleblower awards for individuals who voluntarily provide original information regarding violations of federal commodities or securities laws to the Commodity Futures Trading Commission (CFTC) or the Securities and Exchange Commission (SEC).

A whistleblower is only entitled to an award if the information provided forms the basis of an action that results in Government sanctions of over $1 million. The information provided by the whistleblower must be “original,” in that the information must be derived from the whistleblower’s own independent knowledge, and not public information or information known to the Government from another source.

If the Government recovers over $1 million as a result of the whistleblower’s original information, the whistleblower is entitled to receive an award of 10% to 30% of the Government’s recovery. The CFTC and SEC have discretion in deciding the percentage to award to the whistleblower and will look at a number of criteria in making that decision, including the quality of the information and the degree of assistance provided to the Government by the whistleblower and his or her attorney in the action.

Whistleblowers may submit information anonymously, but an anonymous whistleblower must be represented by an attorney in order to be eligible to receive an award. While a whistleblower must disclose his or her identity when receiving an award, the statute does provide protection to whistleblowers through its anti-retaliatory provisions.

The SEC Dodd-Frank Whistleblower Program is basically brand new. Within the first few months of its operation, the SEC reported that it was receiving approximately 8 tips per day. The SEC issued the first Dodd-Frank Whistleblower Award in August 2012. Under the law, the SEC is required to issue an Annual Report on the Dodd-Frank Whistleblower Program for each fiscal year. The first such report, issued in November 2011 for Fiscal Year 2011, is accessible here. The report for Fiscal Year 2012 is accessible here.

For a free consultation about a potential Dodd-Frank Whistleblower case, financial fraud, or other potential whistleblower case, please call us or click here to submit your information.