The Securities and Exchange Commission (SEC) just gave employees some compelling reasons to come forward if they know something is amiss with their employer’s business practices.
The SEC’s final regs creating a new whistleblower program under the Dodd-Frank Wall Street Reform Act recently took effect.
One major change in the new regs: An employee who voluntarily goes to the SEC with original info that leads to successful enforcement of a federal court or action where the SEC obtains monetary sanctions of more than $1 million could net the employee a bounty of up to 30% of the total penalty.
Previously, whistleblowers could only receive bounties of up to 10% of the penalty.
The increased bounty awards may be good news for whistleblowers, but the new rules have come under criticism. Some business groups, such as the U.S. Chamber of Commerce, believe the new rules will encourage individuals to go right to SEC instead of first reporting problems to company officials.