SEC Proposes Regulation to Implement Dodd-Frank Whistleblower Provisions

The SEC recently proposed a new Regulation 21F under the Exchange Act to implement the whistleblower directive under the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank). Section 922 of Dodd-Frank added Section 21F to the Exchange Act directing the SEC to establish a program conforming to the guidelines of Section 21F that would incentivize individuals to act as whistleblowers regarding potential violations of the securities laws. The statute authorizes the SEC to pay awards to individuals who voluntarily provide the SEC with original information about a possible violation of the securities laws that leads to an enforcement action resulting in monetary sanctions exceeding $1 million. The SEC's proposed regulation is intended to provide a complete and self-contained set of rules for whistleblowers that reflects the statutory provisions. Proposed Regulation 21F is described in Release No. 34-63237. 17 December is the deadline for submitting comments on the proposal.

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