SEC Launches Securities Fraud Whistleblower Program

whistle.jpgThe Securities and Exchange Commission (SEC) introduced a new securities fraud whistleblower program on July 21, 2010, in an attempt to curb federal securities law violations pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act. In an effort to encourage members of the public to report securities law violations, the program offers whistleblowers financial rewards and protection from employer retaliation. To be entitled to an award, which can be as much as 10 percent to 30 percent of the amount collected by the government, eligible whistleblowers must be in compliance with the program’s rules and requirements which require that the whistleblower voluntarily provide original information that leads to a successful enforcement action. Under the Act, any whistleblower who wants to file a claim anonymously must be represented by legal counsel. The SEC is expected to issue final regulations for the program within the next 270 days.

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