Whistleblower Protections Under Sarbanes‑Oxley and Dodd‑Frank

Whistleblower Provisions and Protections WHISTLEBLOWER PROVISIONS AND PROTECTIONS Assistance and information from a whistleblower who knows of possible secu- rities law violations can be among the most powerful weapons in the law en- forcement arsenal. Through their knowledge of the circumstances and individu- als involved, whistleblowers can helo SEC and DOJ identify potential violations much earlier than might otherwise have been possible, thus allowing SEC and DOJ to minimize the harm to investors, better preserve the integrity of the U.S. capital markets, and more swiftly hold accountable those responsible for unlawful conduct. The Sarbanes-Oxley Act of 2002 and the Dodd-Frank Act of 2010 both contain provisions affecting whistleblow- ers who report FCPA violations. Sarbanes-Oxley prohibits issuers from retaliating against whistleblowers and provides that employees who are retaliated against for reporting pos- sible securities law violations may file a complaint with the Department of Labor, for which they would be eligible to receive reinstatement, back pay, and other compensation.” Sarbanes-Oxley also prohibits retaliation against employee whistleblowers under the obstruction of justice statute.*”! In 2010, the Dodd-Frank Act added Section 21F to the Exchange Act, addressing whistleblower incentives and protections. Section 21F authorizes SEC to provide mon- etary awards to eligible individuals who voluntarily come forward with high quality, original information that leads to an SEC enforcement action in which over $1,000,000 in sanctions is ordered. *” The awards range is between 10% and 30% of the monetary sanctions recovered by the gov- ernment. The Dodd-Frank Act also prohibits employers from retaliating against whistleblowers and creates a private right of action for employees who are retaliated against.*”* Furthermore, businesses should be aware that retali- ation against a whistleblower may also violate state, local, and foreign laws that provide protection of whistleblowers. HOUSE_OVERSIGHT_022584