This article is the second in a series of four primers on the main legal regimes incentivizing and protecting whistleblowers who report fraud. This past spring, we published a primer on the False Claims Act (FCA) and we will follow today’s article with additional installments on the Commodity Futures Trading Commission (CFTC) and Internal Revenue Service (IRS) whistleblower programs. Both the FCA and IRS whistleblower program have been in place since the mid-1800s, but have recently experienced a resurgence after undergoing significant amendments. On the other hand, the SEC and CFTC whistleblower programs were created only in 2010 through the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Dodd-Frank Act).

On balance, the FCA and three core whistleblower programs provide avenues through which individuals can report fraud occurring across a wide swath of industries. The number of whistleblower-initiated cases filed under the FCA and tips submitted to the whistleblower programs have reached unprecedented heights in recent years, as the public becomes more aware of the rewards and protections provided by the law. It has therefore become imperative for attorneys, potential whistleblowers, and potential defendants to become familiar with the applicable laws, their backgrounds, causes of action, available damages, and protections against retaliation. This four-part series combines perspectives from whistleblower and defense counsel to provide measured insight into each of the four main whistleblower regimes. In this second part, we discuss the SEC whistleblower program.

Background and Legislative History