On August 12, 2011, the SEC’s whistleblower rules became effective, establishing procedures for whistleblowers to report violations to the SEC under Section 922 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act). Pursuant to the Dodd-Frank Act, the SEC is authorized to pay awards to whistleblowers who voluntarily provide the SEC with original information about a violation of the securities laws that leads to the successful enforcement of an SEC action that results in monetary sanctions exceeding $1,000,000. The range for awards is between 10% and 30% of the money collected.
The SEC’s Offi ce of Whistleblower opened on August 12th and seven staff members are in place to review claims. The Offi ce of Whistleblower updated its website4 to provide links to the new Form TCR (Tip, Complaint, and Referral Questionnaire) and Frequently Asked Questions.
For a list of suggested action items for public companies to take in connection with the whistleblower rules, see “Practice Tips—Action Items in Connection with Whistleblower Rules” on this page