Dodd-Frank, Securities, Whistleblower


In 2010, Congress enacted the Dodd-Frank Wall Street Reform and Consumer Protection Act in response to the stock market collapse and economic downturn as well as the Bernard Madoff scandal and other well-publicized frauds perpetrated against investors. Among its numerous provisions, the Dodd-Frank Act amended the Securities Exchange Act of 1934 to add a new section—Section 21F—entitled “Securities Whistleblower Incentives and Protection.” The Dodd- Frank Act also directed the Securities and Exchange Commission to establish an Office of the Whistleblower to administer the provisions of the new section. The Commission subsequently adopted regulations that went into effect on August 12, 2011 to implement these provisions. This Article will discuss one of the crucial mechanisms of the SEC’s whistleblower program: the award program. Specifically, this Article will discuss the eligibility requirements for an award, the factors the Commission considers when determining an award amount, and the award review process.

This Article also highlights three matters a potential award applicant should consider before filing for an award: (1) an applicant will only be eligible if the information was provided to the Commission after Dodd-Frank was enacted; (2) there must be a sufficient nexus between the tip provided and the covered enforcement action for an applicant to be eligible for an award; and (3) a whistleblower will generally not be eligible to receive an award if the whistleblower’s information was submitted to the Commission after the Commission had requested the information, unless the whistleblower had voluntarily provided the same information to another agency or self-regulatory organization prior to the Commission’s request.



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