Dodd-Frank Meaningfully Expands Whistleblower Protection

The financial reforms in the Dodd-Frank Wall Street Reform and Consumer Protection Act ("the Dodd-Frank Act") passed in 2010 contain sweeping expansions to the protections and incentives given to employees who report violations of federal securities laws.  In addition to enhancing existing whistleblower protections, the Act now allows individuals who provide "original information" regarding securities laws violations to the SEC or CFTC sanctions to recover up to 30% of the amount sanctioned.  This "bounty" may give employees an incentive to bypass internal ethics and compliance controls which emphasize early internal reporting and remedial action, in favor of going straight to the government in order to reap a potentially lucrative financial reward.