By any measure, the whistleblower bounty provisions of the Dodd-Frank Act have been an unmitigated success in bringing essential information to the Securities and Exchange Commission, leading to substantive enforcement actions. According to an SEC press release, the whistleblower program has led to over $500 million in financial remediation paid by companies and bounties paid to 33 whistleblowers have now exceeded the $107 million mark. According to SEC Chairperson Mary Jo White, “The SEC’s whistleblower program has proven to be a game changer for the agency.”
These whistleblower reports have come from far and wide, including all 50 states and 95 foreign counties as well. The SEC has also been active in prosecuting companies that it believes has tried to dampen employees’ legal right to report illegal conduct to the SEC. The SEC had concluded enforcement actions against companies that have forbidden employees from reporting to the SEC in confidentiality agreements (KBR); companies that attempted to forbid employees from receiving the statutorily mandated whistleblower bounties in severance agreements (Health Net Inc. and BlueLinx Holdings), and one company that made an award to a whistleblower who suffered retaliation as a result of reporting his employer’s illegal conduct to the SEC (Paradigm Capital).
