On May 25, 2011, the Securities and Exchange Commission adopted rules to create a whistleblower program that rewards individuals who provide the agency with high-quality tips that lead to successful enforcement actions. In short, the new rules provide that a whistleblower who voluntarily provides the SEC with original information that leads to the successful enforcement by the SEC, a federal court ,or administrative action in which the SEC obtains monetary sanctions totaling more than $1 million is eligible to receive a "bounty" for that information.
This new whistleblower program has the potential for wideranging effects on public companies of all kinds and sizes. To help us understand the program and its implications, a number of law firms have put drafted client memos and alerts providing their take on the rules. Assembled below are links to a number of such memoranda as well as the SEC's Fact Sheet on the new rules.
Dechert LLP, SEC Adopts Final Whistleblower Rules
Ropes & Gray LLP, The SEC's New Whistleblower Compensation Rules
SEC Fact Sheet, SEC Adopts Rules to Establish Whistleblower Program