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What are the basics underlying Dodd-Frank whistleblowing?

Congress passed the consumer-protective Dodd-Frank legislation in 2010. The law's passage owed partially to a widespread belief that greater safeguards needed to be established for individuals brave enough to step forward and identify violations of U.S. securities laws within their companies.

The enactment made material adjustments to whistleblower-linked provisions. A core intent of lawmakers was to shore up protections for those individuals to better encourage fraud reporting across a broad universe of concerns. As we note on our website at the proven Connecticut business law firm of Shepherd, Finkelman, Miller & Shah, securities violations include conduct like this:


  • Insider trading of securities and proprietary data
  • Issuance of false information concerning financial matters
  • Stock price manipulations
  • Fraudulent registration and sale of securities

Although many parties can signal internal company fraud, designation as a Dodd-Frank whistleblower follows a vetting process. An individual must "voluntary" disclose fraud that is "original" (not based on agency-known information or knowledge that is already in the public domain). Moreover, that information must induce federal regulators to newly open or reopen a case and pursue it to a successful conclusion.

If such is the case, a securities whistleblower may be eligible for a sizable financial recovery in acknowledgment of the key role that he or she played in spotlighting and deterring fraud.

We will have a bit more to say on Dodd-Frank securities whistleblowing in our next blog post, especially in light of a recent U.S. Supreme Court ruling that directly addresses an important feature of the law.

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