Encouraging Whistleblowers To Report Internally

Law360, New York (January 20, 2012, 12:58 PM EST) -- As required by the Dodd-Frank Wall Street Reform and Protection Act, in May 2011, the U.S. Securities and Exchange Commission (SEC) adopted regulations governing monetary awards to employees who report securities law violations to the SEC.

One of the more controversial aspects of the final regulations adopted by the SEC is that an employee is not required to report an alleged violation internally, but may bypass the company’s whistleblower hotline completely and report directly to the SEC.

As a result, companies are faced with the risk...
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