The broad definition of the term whistleblower has been used to describe a person who reports violations of securities laws. However, in terms of the SEC's whistleblower policy, there was some discrepancy regarding when the protection that whistleblowers are afforded under law actually takes effect.
The SEC has issued an interpretive rule explaining that
whistleblowers do not need to report to the commission in order to
be eligible for protection from employee retaliation.
Under the Dodd-Frank Act, there were two provisions that extended
protection against retaliation to any whistleblower who reported
company misconduct. The unclear aspect was who was to receive the
report. In one provision the whistleblower could report the
transgression internally; in another provision the whistleblower
was defined as such when he or she reported violations of
securities law directly to the SEC.
On August 4, 2015, the SEC released a statement intended to provide
clarity in these dual whistleblower definitions as outlined in the
Dodd-Frank Act. A whistleblower is entitled to the protection
afforded them by the Dodd-Frank Act provisions for anti-retaliation
protection even if they do not report the wrongdoing to the SEC.
However, the statement further explained that in order for a
whistleblower to be entitled to the awards and confidentiality
extended to by the Dodd-Frank Act, they must make a report to the
SEC detailing the violations of securities law.
Following the SEC's release on August 4, 2015, Senator Jack
Reed (D-Rhode Island) introduced S.1960, a bill that extends the
current five-year timeframe that the SEC has to enforce reported
violations in securities law to ten years after the date the
violation occurred.
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