The Dodd-Frank Wall Street Reform and Consumer Protection Act came into effect in July 2010. Named after its sponsors, Senator Christopher J. Dodd and Representative Barney Frank, the Dodd-Frank Act was in response to the huge financial crisis of 2007-2008, with the intention to make the U.S. financial system safer for consumers and taxpayers.
In addition to its primary objective of providing the grounds for monitoring the country’s financial system and its adherence to the law, among several other things, the Dodd-Frank Act mentions what programs and protections are in place for whistleblowers.
Reward program and protections
According to section 922 of the Dodd-Frank Act, the U.S. Securities and Exchange Commission will reward eligible whistleblowers if the information provided by them leads to a successful enforcement action that yields monetary penalties over $1 million. The reward paid is 10–30 percent of the total monetary penalties collected by the SEC.
When it comes to protections, the Dodd-Frank Act clearly prohibits employers from retaliating against a whistleblower. Additionally, the act provides whistleblowers with private cause of action if they are discriminated against or laid off by their employers.
One of the main objectives of the Dodd-Frank Act was to protect small private investors from losing their savings from risky affairs such as pyramid schemes, insider trading, market manipulation, accounting fraud and other similar activities.
Being party to a Dodd-Frank Act case
While there are various similarities between the False Claims Act and the Dodd-Frank Act, the most important difference is that the former does not protect against fraud in the financial sector, while the latter is targeted at frauds in the financial sector.
With that said, one must remember that every case under the Dodd-Frank Act is unique and, therefore, it requires customized attention. In fact, customized attention is more necessary when the opposing party is a big corporation and one’s livelihood is at stake. So, for any whistleblower, it is always wise to seek appropriate legal guidance.