The Securities and Exchange Commission this week adopted a new set of rules that implement the controversial whistleblower provisions of the Dodd-Frank Financial Reform Act, rules which are designed to encourage the reporting of serious financial fraud within financial institutions and other corporations by offering substantial rewards or bounties to the whistleblowers.
Adopted by a 3-2 vote of the commission, the new rules, which can award a whistleblower a bounty of up to 30% of any recovery or monetary sanctions of over $1 million resulting from a whistleblower’s significant tip, are expected to lead to a marked step-up in enforcement actions by the financial regulatory agency.
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