My Company is Committing Securities Fraud: SEC Whistleblower Law

May 6, 2011

As part of the Dodd-Frank Act, Congress passed a law that will allow individuals who observe securities fraud to anonymously alert the SEC.  If the SEC/DOJ eventually recovers money from the whistleblower’s information, the individual can receive a portion of that recovery.  Specifically, the SEC announced that:

To be considered for an award, a whistleblower must voluntarily provide the SEC with original information about a violation of the federal securities laws that leads to the successful enforcement by the SEC of a federal court or administrative action in which the SEC obtains monetary sanctions totaling more than $1 million.

There are certain exceptions (like for people who already are bound to reveal that information), but it combats securities fraud and gives employees an anonymous incentive to come forward.


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