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SEC whistleblower reward program effective this month, P.1

As we have mentioned on this blog before, the SEC recently established a whistleblower reward program to encourage knowledgeable insiders to report securities violations to the SEC. The program goes into effect on August 12

The new SEC whistleblower reward program was established by Dodd-Frank Act's amendments to the Securities and Exchange Act of 1934, and provides incentives and protections for employees to report securities violations to management and the SEC.

Whistleblowers often lose their jobs or face other retaliation for reporting violations. Under Dodd-Frank, the anti-retaliation provisions of the Sarbanes-Oxley Act are strengthened, which discourages employers from retaliating.

Because the risk of reporting violations is high, it is important for whistleblowers to select a qualified attorney to assess their case. If the whistleblower submission is insufficient or faulty in some way, the whistleblower will fail to be eligible for an award and will open himself or herself to the risk of retaliation regardless.

Under the SEC whistleblower program, whistleblowers may receive between 10% and 30% of any amount the SEC recovers in an enforcement action, but only in cases where over $1 million is recovered. The SEC has been accepting information from whistleblowers since the program went into effect on July 22, 2010.

Many corporations have derided the new program, saying that it will provide a means for disgruntled employees to make money on their employers' mistakes. As a recent article in the National Law Journal says, though, the new program will allow whistleblowers-who often face the threat of retaliation for reporting violations-to overcome their fears and share what they know about corporate wrongdoing.

Providing such incentives for whistleblowers will not only ensure better compliance with federal laws and regulations, but will assist in boosting public confidence in the financial markets

In our next post, we'll look at how internal compliance programs have responded to the new whistleblower program, and ....

Source: National Law Journal, "SEC whistleblowers will protect investors and earn their awards," David J. Marshall, 28 July 2011.

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I have been a litigator for close to 20 years and Alan is most certainly one of the best attorneys I have ever come across.
Mr. Lescht is an excellent Trial Lawyer, He is calm, cool, and collected.
I also appreciated Alan's frankness and his ability to identify what is important and what is not when going through a case like this.
I would highly recommend Alan to anyone who needs an exceptional and incredibly talented Employment Attorney.
Mr. Lescht is an extraordinarily responsive attorney, returning my emails and phone calls within minutes. I would absolutely recommend him to anyone who thinks they may need a lawyer. Definitely incredible work.
I was impressed with his knowledge and professionalism, and I will always be grateful for his guidance.

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