Dodd Frank Whistleblower Facts That You Should Know

There are certain facts and hypes concerning the Dodd Frank Whistleblower Act and therefore, it becomes necessary to differentiate between the two to get the real picture. Here are some aspects that examine what is hype and what is real:

The fact remains that certain things have not changed and these include the following:

• The employees, both in private and public companies are encouraged to report any violations of compliances to their seniors, supervisors, compliance personnel or such people directly or through other means such as websites, confidential hotlines etc.
• The assurance to the employees that they would not be retaliated, terminated or discriminated if they step forward in reporting any non-compliance
• The examination of issues concerning non-compliance in an appropriate way
• The imposition of corrective measures by bringing changes to the business practices and to report issues to regulators as and when required.

It is important to remember that certain things that are new are limited. The financial incentives introduced for whistleblowers are expected to increase the interest of the employees in reporting non compliance of laws. This would however put extra burden on the companies that would be facing enquiries when such reports are made. However, this has also been seen that there has not been a significant increase in the number of reports by the employees reporting non-compliance of issues by the companies. Nevertheless the quality of documentation has improved which is because the whistleblower’s lawyers are being more careful in shaping these reports.

As a matter of fact, the companies need not revamp their policies from scratch if they have been complying with the above mentioned issues. However, it is recommended that companies should encourage their employees to report any irregularities directly without any intimidation. Keeping this in mind, the following tips should be taken note of:

• Effective leadership : it is very important for the top executives of the company to regularly speak about this issue encouraging the employees to report any compliance issues. Such messages coming from the top tier go down well with the employees.


• Training : employee training on these issues is relatively important and if such training is conducted, there should be adequate certification proving the same.


• Evaluation of job performance : the component of compliance reporting in the evaluation of a job performance can largely help determine the best employees. Any reporting made by an employee should be examined and documented in the correct manner.


• Hotlines and other modes of reporting : reporting mechanisms such as hotlines, websites or other modes should be periodically informed about. This helps the employees promptly take action when they require it.


• Prompt Response : it is the duty of the management to take prompt action when a compliance issue is reported. This instills confidence in the employees preparing the reports that prompt action is being taken.


• Incentives to report : the employees should have certain incentives to report compliance issues. Whether they first report to the company and then to the SEC is to be seen in cases where monetary sanction results.

Such rules would instill confidence in the minds of the employees and increase the chances that they would report an issue to the company first.