On May 25, 2011, over a month after its scheduled release date, the SEC adopted rules to implement Section 21F of the Exchange Act, "Securities Whistleblower Incentives and Protection," which was added by Section 922 of Dodd-Frank. Section 21F directs the SEC to pay awards to eligible whistleblowers who voluntarily provide the SEC with original information about a violation of the federal securities laws that leads to a successful enforcement action resulting in monetary sanctions over $1 million. Awards will be between 10% and 30% of the total monetary sanctions collected. While the final rules provide some incentives for individuals to report possible violations first (or only) to their employers, rather than to the SEC, they continue to provide significant financial incentives for individuals to report directly to the SEC, bypassing a company’s internal compliance process.
In response to the new rules, which take effect in 60 days from their publication in the Federal Register, companies should review and update compliance and ethics programs to ensure their programs allow them to identify, investigate, and handle possible misconduct quickly and effectively.
- Partner
Mark Reuter advocates for business clients in transactions, proceedings and conflicts regulated by federal and state securities laws and stock exchange rules. A partner in the firm’s Business Representation & Transaction ...
Topics/Tags
Select- Securities Law
- SEC
- Securities Regulation
- Cybersecurity and Privacy Law
- Mergers & Acquisitions
- Coronavirus
- Economic Sanctions
- Ohio LLC Act
- Cybersecurity Regulation
- Nasdaq
- Corporate Law
- Tax Planning
- Corporate Tax
- Paycheck Protection Program
- Dodd-Frank
- IRS
- JOBS Act
- FAST Act
- Proxy Access Rules
- Securities Litigation
- Consumer Protection Act
- Corporate Governance
- SEC Enforcement
- Crowdfunding
- Cryptocurrency
- Taxation
- Hedging
- Private Offerings
- Real Estate Law
- Conflict Minerals
- Emerging Growth Companies
- Investors
- Pay Ratio Disclosure
- Intellectual Property
- Technology
- Whistleblower
- Opportunity Zone
- LIBOR
- Accredited Investors
- Sales Tax
- United States Supreme Court
- Online Trading Platforms
- IPO
- Registration Statement
- Executive Compensation
- Health Care Act
- Annual Reports
- Ohio Foreclosure Reform
- Director Compensation
- Family-Controlled Entities
- Gift and Estate Transfers
- Wall Street Reform
- Board of Directors
- Director Independence
- Clawback Rules
- Total Shareholder Return
- Cyber Insurance
- Data Breach
- Lenders
- Receivership Statute
- Regulation A
- Regulation D
- Compensation Committee Certification
- Government Shutdown
- CDEs
- CDFI Fund
- Community Development Entities
- Community Development Financial Institutions Fund
- New Markets Tax Credit
- NMTC
- NMTC Financing
- Regulation Fair Disclosure
- Social Media
- Benefits
- Healthcare Reform
- Litigation
- Marketing
- Public Company Transition Rules
- Tax Credit
- Employment Incentives
- HIRE Act
- Social Security Tax
Recent Posts
- SEC Provides Sample Guidance on Disclosure of Russia-Ukraine Invasion
- Proposed SEC Climate-Related Disclosure Requirements
- Proposed SEC Cybersecurity Rules
- International Unrest and its Impact on M&A
- The United States Ramps Up Severe Economic Sanctions on Russia and Export Controls
- Revised Ohio LLC Statute
- Beware of ‘Spring-Loaded’ Awards: SEC Issues Updated Accounting Guidance
- SEC Opens Floodgates for ESG Proposals
- NYSE Proposes an Amendment to the Shareholder Voting Requirement
- SEC Charges Pearson plc for Misleading Investors About Cyber Breach and Inadequate Disclosure Controls