The SEC has adopted the Dodd-Frank whistleblower reward and protection rules it proposed last year.
Bloomberg said the commissioners voted 3-2 today in Washington.
The SEC received 1,200 comments about to the proposed rules. Many voiced concern that whistleblowers, who can receive between 10 to 30 percent of recoveries, will bypass internal reporting and speak directly to the SEC instead.
A federal district court decision from New York reinforced the concerns. In an opinion issued on May 4, Judge Leonard Sand said Dodd-Frank whistleblower protections only apply to people who personally report their complaints to the SEC. The D&O Diary talked about the decision here.
The SEC’s reward program started under the proposed rules. FCPA-related whistleblower complaints, prepared by specializing law firms, are now typically 30 to 40 pages long and include numerous internal emails and company documents.
Professionals said responding to the SEC about the complaints is diverting time, attention, and money away from existing compliance programs.
Download the rules as proposed here.