Whistleblower Risks Just Increased: What to Watch For

A few "sleeper" provisions in the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 ("the Act") authorize financial incentives for whistleblowers who provide original information to the U.S. Securities and Exchange Commission ("SEC") or U.S. Commodity Futures Trading Commission ("CFTC"). These measures increase the enforcement and litigation risks and the compliance costs for publicly traded companies, including large healthcare providers such as pharmaceutical companies. Hundreds of tips have been pouring in, although the SEC has yet to issue the implementing rules and regulations.

As one plaintiff's attorney has remarked, the Act offers a "trifecta of enticements" for would-be whistleblowers who can report violations anonymously, enjoy heightened protections from retaliation—and now have a direct federal cause of action for the recovery of twice back pay, with interest, reasonable attorneys' fees and litigation costs—and be paid between 10 percent