Dodd-Frank: Final Whistleblower Provisions Take Effect August 12th

On May 25, 2011, Securities and Exchange Commission ("SEC") adopted final rules implementing the whistleblower provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act ("Dodd-Frank Act"). The final rules, which take effect on August 12, 2011, are amongst some of the most debated and controversial rules to be promulgated in the wake of the financial crisis. Much of the controversy surrounding the proposed rules is the absence of any requirement that a whistleblower report initial findings through a company's internal compliance program. Commentators have argued that the rules will serve to undermine existing compliance programs by providing large financial incentives for employees to bypass such programs to reap life changing rewards. Despite the objections of numerous commentators, the final rules do not require a whistleblower to report violations internally in order to qualify for an award. Rather, the final rules provide certain incentives for