The New SEC Whistleblower Program: What the SEC Has Learned (at Least For Now) From the False Claims Act About Avoiding Whistleblower Abuses

INTRODUCTION

The sweeping overhaul of the financial system in the Dodd-Frank Wall Street Reform and Consumer Protection Act ("Dodd-Frank" or "Act") included a provision to encourage more "whistleblowers" to disclose alleged wrongdoing by publicly traded companies, financial services institutions, and other covered entities by rewarding those who come forward with substantial monetary awards.¹ This concept, initially proposed by University of Alabama Law School Professor Pamela (Bucy) Pierson in a seminal article published eight years ago, is based upon the view that so-called "qui tam enforcement" had worked so well in the enforcement of the civil False Claims Act ("FCA") that it should be imported to securities enforcement.²