Does the Securities and Exchange Commission’s (SEC) recent whistleblower award make your internal whistleblower hotline efforts futile? As of late, if feels like there are 14 million reasons why the answer is “yes.”
When Dodd-Frank was signed into law in July 2010, many thought that one of its most powerful features was the creation of a new whistleblower program. In addition to creating the Office of the Whistleblower, the rules also created a new bounty system intended to incentivize whistleblowers to approach the SEC with their suspicions. The dollars seemed potentially significant: a whistleblower can receive 10 to 30 percent of the penalty that the SEC imposes based on information the whistleblower provides to the SEC (provided, however, that the SEC or other government agency collects at least $1 million).