What is the Dodd Frank Bill And How Does It Affect Whistleblowers?

In short, the Dodd Frank Bill was a law that came about after the financial crisis of 2008. At this time many of the large financial institutions were in serious trouble, with some on the verge of collapse. There were many contributing factors as to why this financial calamity happened and everyone seems to have a different opinion, although the world stock markets taking a nosedive certainly didn’t help. Heavy lending by the banks themselves left the US Government little option but to bail out these financial institutions.

In July 2011 President Obama passed new legislation introducing the Dodd Frank Wall Street Reform and Consumer Protection Act, otherwise referred to as the Dodd Frank Bill. It is hoped that this will encourage the financial institutions to keep a ‘tighter eye’ on their own financial funds and be much more open with both the Government and public alike. They have in effect become responsible for their own actions, and it is hoped that this will prevent the need for any future bail out.

Whistleblower incentives and protection

Within the Bill, the government also built in some reward and protection for the whistleblower in the hope that more people would be willing to expose fraud and other financial irregularities within the institutions in which they worked, without fear of retaliation or reprisals. Defrauding the government is carried out on a grand scale and has become second nature to many organisations. With the help of the general public it is envisaged that many millions of dollars will be saved.

The Bill allows the whistleblower to go directly to the SEC (the Securities and Exchange Commission); they do not have to approach their Company heads before taking this course of action, or tell them of their intentions to speak of their concerns about a possible violation of the law. As long as the information given to the SEC is based on some solid evidence, it doesn’t matter whether the violation is in progress or about to happen and provided the whistleblower has some solid ground for their concerns they will be protected under the Dodd Frank Bill. This means that his /her employer may not take any actions deemed retaliatory such as terminating employment, suspension from the work place, harassment or any form of behaviour that might be seen as threatening.

Why should I tell?

Think about it, for every dollar scammed away by the big companies that does not find its way into the Government pot, you, the US tax payer will end up paying more. If the government cannot find the money to fund public services or has a shortfall of funding, then what happens? Usually taxes rise, and that affects everyone’s pocket.

If by helping the Government to cut down on financial wrongdoing and irregularities, it helps all US citizens wallets, not only your own, isn’t that the right thing to do?

The reward

The Dodd Frank Bill also allows for the whistleblower to receive a monetary reward for information given, as long as the case is proven. The amount can be substantial, anything from 15 – 30% of the amount of money recovered (providing the amount is in excess of $1million). You do not need to be a genius to work out that for doing the ‘right thing’ you could receive a fair few dollars.

If you decide to take this route, one of the first things you need to do is contact an experienced lawyer who works within this field, generally known as a Qui Tam lawyer. They will be able to talk you through what will happen and what to expect.

Will the Bill work?

Let’s hope so.

Slowly, and little by little, the markets seem to be recovering. The financial institutions it would appear, are taking fewer high-risk strategies and a surer, safer approach to its business. If this is because it knows the Government is keeping its steely eye upon them, or because of the public awareness of what they can do to help, then surely that alone must mean the Dodd Frank Bill has done what it set out to do, which is to reign in the banks making them more accountable.