The Dodd-Frank Wall Street Reform and Consumer Protection Act that was signed into law on July 21, 2010 rewards whistleblowers who report securities and commodities fraud. The rewards can be anywhere from 10% to 30% of any sanctions exceeding $1 million (including penalties, disgorgement and restitution) arising from a judicial or administrative action brought under the securities laws or Commodity Exchange Act.
The rewards are paid out of special investor protection Funds administered by the SEC and CFTC. The SEC and CFTC decide the amount of the reward within the 10% and 30% range, taking into account the significance of the information, the degree of assistance provided by the whistleblower and his/her counsel, and the overall deterrent effect of making awards to whistleblowers, along with additional factors that the Commissions may include in rules or regulations. Awards may be appealed to the courts.
Government employees and employees of self-regulatory organizations are not eligible for rewards. Nor is anyone criminally convicted for the violation that he/she reports, or anyone who obtains information about fraud as a result of performing an audit of financial statements required under the securities laws. Rewards cannot be paid for information derived from public disclosures, unless the person was the source of the information.
Whistleblowers may file for an award anonymously, provided they are represented by an attorney. The Act requires the Commissions to preserve the confidentiality of information provided by whistleblowers and their identity.
The Act also allows whistleblowers to bring an action for retaliation by employers for either reporting fraud to the Commissions or assisting an investigation conducted by the Commissions. The employee may sue for reinstatement, back pay and attorneys fees.
The text of the laws can be found at http://docs.house.gov/rules/finserv/111_hr4173_finsrvcr.pdf. See Sections 748 (Commodities) and 922(a) (Securities).
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