Whistleblowing Still a Hot Topic

The Dodd-Frank Act mandates new regulations for whistleblowing, and calls for the Securities and Exchange Commission to adopt new rules to reward those who come forward with actionable information about any securities violation (not just insider trading). Last fall, the SEC proposed that those who provide information leading to the recovery of more than $1 million could receive between 10 percent and 30 percent of the amount recovered. CFO Magazine reports that the commotion over the proposed regulations hasn’t died down; rather, it’s heated up. While some say that the proposed rewards will help keep firms honest, others say that the rewards incentivize individuals to bypass internal organizational reporting mechanisms and instead go straight to the SEC.