Dodd-Frank: The Whistleblower Provisions Explained
The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 created the SEC and CFTC whistleblower award programs, paying 10 to 30 percent of sanctions above 1 million dollars, and added anti-retaliation protection for employees who report securities law violations to the Commission.
What Dodd-Frank changed
Before 2010 the SEC had only a narrow bounty program limited to insider trading. Dodd-Frank replaced it with a broad mandatory award program covering any securities law violation, and created a parallel program at the Commodity Futures Trading Commission.
It also created a private right of action for retaliation, allowing an employee to sue in federal court rather than proceeding through an administrative process first.
The retaliation protection and its limit
Dodd-Frank protects employees from discharge, demotion, suspension, threats, and harassment for providing information to the Commission or assisting an investigation. Remedies include reinstatement, two times back pay with interest, and attorney fees.
The Supreme Court held in Digital Realty Trust v. Somers that this protection applies only to those who actually reported to the SEC. An employee who reported only internally is not covered by Dodd-Frank, though Sarbanes-Oxley section 806 may still apply.
The practical consequence is significant. If you are considering an internal report and you want Dodd-Frank protection, you need to have reported to the Commission as well.
Sarbanes-Oxley compared
Sarbanes-Oxley section 806 protects employees of public companies who report conduct they reasonably believe violates securities law, including internal reports to a supervisor.
It has a much shorter deadline, 180 days, and requires filing with OSHA before going to court. Dodd-Frank allows six years and a direct federal court action. Many cases are brought under both.
Frequently asked questions
Does Dodd-Frank protect me if I only reported internally?
No. Under Digital Realty Trust v. Somers, Dodd-Frank protection requires a report to the SEC. Sarbanes-Oxley section 806 may still protect an internal report.
What is the deadline for a Dodd-Frank retaliation claim?
Six years from the violation, or three years after the facts were known, with a ten year outer limit. Sarbanes-Oxley requires an OSHA filing within 180 days.
Does Dodd-Frank cover commodities?
Yes. It created the CFTC whistleblower program on the same 10 to 30 percent structure for commodities, derivatives, and swaps violations.
The attorneys who handle these cases
Related reading
Talk to a whistleblower attorney before you report
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