Following the 2008 financial crisis, the U.S. government has taken aggressive steps to regulate the financial industry and prevent another crisis from happening. The Securities and Exchange Commission (SEC) is the government agency tasked with regulating the financial sector and enforcing the Dodd-Frank Act.

Dodd-Frank is the federal government’s response to the financial crisis. In addition to substantial regulatory changes impacting Wall Street, the Dodd-Frank Act also includes provisions for whistleblower rewards. It could benefit you to discuss Dodd-Frank and Charleston whistleblower claims with a seasoned attorney.

What is the Dodd-Frank Act?

Formally known as the Dodd-Frank Wall Street Reform and Consumer Protection Act, Dodd-Frank was instituted as a response to the Great Recession. The Act includes a number of measures designed to prevent another financial crisis and halt the type of securities fraud and mismanagement that allowed it to occur previously. Some of the ways Dodd-Frank regulates the financial industry include:

  • Creating the Financial Stability Oversight Council
  • Monitoring the stability of companies that are deemed “too big to fail”
  • Creating the Consumer Financial Protection Bureau
  • Limits on speculative trading
  • Regulates credit default swaps

One of the important aspects of Dodd-Frank is the creation of whistleblower protections and rewards, which a person in Charleston could take advantage of. In exchange for information provided to the government about financial wrongdoing or fraud, the SEC can offer a monetary award paid directly to the whistleblower.

Pursuing a Whistleblower Claim

The whistleblower program is designed to reward private citizens that provide information regarding bribes or other forms of securities violations to the federal government. This information must be original, meaning that the whistleblower is the first person to report this tip to the SEC.

Not every tip will qualify for a reward. Whistleblower incentives only apply in cases where the SEC recovers at least $1 million through enforcement actions from the offender. For smaller cases, whistleblower rewards are not available.

The report must also be voluntary. That means that a whistleblower is someone who is acting out of their own free will and does not have a legal obligation to turn over the information. For example, a person who has been served with a subpoena to turn over documentation is not eligible for a whistleblower reward if that information leads to successful enforcement action.

The amount of the reward can vary. Typically, the SEC will award a whistleblower between 10 and 30 percent of the money they recover through enforcement actions based on the tip.

Protection from Retaliation

One of the factors that can hinder reports of wrongdoing is fear of retaliation. Many people fear that reporting information to the SEC—in particular when this report involves an employer—could have a harmful impact on their career.

To combat these fears, Dodd-Frank provides certain levels of protection for whistleblowers. Specifically, the Act bars employers from taking retaliatory actions against whistleblowers that report to the SEC. The Act enlarges the statute of limitations for retaliation claims under existing law and provides potential rewards for a successful retaliation lawsuit.

Contact an Attorney to Discuss a Dodd-Frank Whistleblower Claim in Charleston

If you are considering serving as a whistleblower to the SEC, it could be in your best interest to first speak with an attorney about your options. There are legal protections available to whistleblowers but is important to follow the appropriate procedures to ensure those protections apply to you. If you are ready to pursue a whistleblower claim in Charleston in accordance with the Dodd-Frank Act, now is the time to speak to an attorney. Reach out today to learn more.

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