The Wall Street Reform bill, recently reported out of conference, includes a number of provisions designed to protect employees who report fraud in the commodity and stock exchanges. The bill includes two qui tam provisions that protect whistleblowers who disclose “original information” concerning major fraud.
The bill overturns judicial precedents under the Sarbanes-Oxley Act that restricted jury trials and exempted subsidiaries. For the first time employees at “nationally recognized” “statistical rating organizations” such as Moody’s and Standard & Poor’s, have whistleblower protection.
Stephen M. Kohn, Executive Director of the National Whistleblowers Center, said, “This is a major step forward in policing overt fraud and abuse in the financial services and the commodity and stock exchanges. It places brokers, traders, and bankers in a position to report fraud, keep the markets honest, and save investors hundreds of billions of dollars.”
Lindsey M. Williams, Director of Advocacy and Development at the National Whistleblowers Center, said, “Congress recognizes the critical role employees play in the detection and enforcement of anti-fraud laws by including these provisions. Employees are the number one source of fraud detection according to numerous studies, including one by the University of Chicago Booth School of Business.”
For the full conference report of the Dodd-Frank Wall Street Reform and Consumer Protection Bill, and the sections that pertain to whistleblowers, click here.
The NWC urges members of the public to send a letter to their representatives in Congress, to ensure that the whistleblower provisions in this bill remain intact and become law. To take action, click here.
*Meryl Grenadier (NWC fellow) drafted this post