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SEC adopts final rules on Dodd‐Frank Whistleblower Program

Michael E. Clark (Special Counsel at Duane Morris LLP, New York, New York, USA)
Laurence S. Lese (Partner at Duane Morris LLP, New York, New York, USA.)
F. Reid Avett (Associate at Duane Morris LLP, New York, New York, USA)

Journal of Investment Compliance

ISSN: 1528-5812

Article publication date: 13 September 2011

Abstract

Purpose

Recently, the US Securities and Exchange Commission (SEC) adopted final rules for the expanded whistleblower program established by the Dodd‐Frank Wall Street Reform and Consumer Protection Act. The rules raise challenging issues, perhaps the most significant being their impact on existing compliance and corporate governance procedures. This paper seeks to examine this issue.

Design/methodology/approach

The paper analyzes the final rules and their impact on public companies.

Findings

Publicly listed entities have cause for concern that their existing compliance programs may be bypassed by whistleblowers who now have strong incentives to place personal interests ahead of loyalties to employers.

Practical implications

Companies need to improve their compliance programs to limit the potential hazards.

Originality/value

The proffered “steps to potentially minimize Dodd‐Frank whistleblowers” can help publicly traded companies – and particularly multinational enterprises subject to the Foreign Corrupt Practices Act – to avoid the significant risks that Dodd‐Frank presents to them.

Keywords

Citation

Clark, M.E., Lese, L.S. and Reid Avett, F. (2011), "SEC adopts final rules on Dodd‐Frank Whistleblower Program", Journal of Investment Compliance, Vol. 12 No. 3, pp. 33-38. https://doi.org/10.1108/15285811111172286

Publisher

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Emerald Group Publishing Limited

Copyright © 2011, Emerald Group Publishing Limited