In 2010, Congress enacted the Wall Street Reform and Consumer Protection Act, otherwise known as the Dodd-Frank Act, in response to the banking and investment problems that led to the 2008 economic recession. The Dodd-Frank Act was an amendment of the Securities Exchange Act of 1934 and sought to more stringently regulate the U.S. financial industry, specifically large banks and insurance companies, to prevent failures that have major negative effects on the national and global economies.
The Dodd-Frank Act is unique, in that it provides both a whistleblower incentive program, as well as protection from retaliation.
The Dodd-Frank Act prohibits employers generally from retaliating against whistleblowers who, inter alia, “mak[e] disclosures that are required or protected under the Sarbanes–Oxley Act of 2002 (15 U.S.C. 7201 et seq.) … and any other law, rule, or regulation subject to the jurisdiction of the” SEC. See 15 U.S.C. 78u–6(h)(1)(A)(iii).Under the Dodd-Frank Act, prevailing employees are entitled to economic losses and two times owed back pay.
In addition to Dodd-Frank’s anti-retaliation provision, the Act also created a bounty system that provides awards to whistleblowers when they disclose information directly to the SEC and that information results in a successful prosecution of a securities law violator. Under the Act, a whistleblower providing “original information” relating to a violation of securities laws which leads to the recovery of monetary sanctions of more than $1 million is entitled to a bounty of between 10 and 30% of the recovery. See 15 U.S.C. 78u–6.