Sure, sure, whistleblowing pays off by relieving one’s conscious. But did you know it now also pays a much higher monetary reward?
With the Dodd-Frank Wall Street Reform bill now in place, whistleblowers will not only have even more protection from their employer seeking revenge, they will also be rewarded financially at a much greater rate than in the past. According to the recent reform, successful informants will be entitled to collect “10% to 30% of the wrongdoers’ payout” to the securities and exchange commission.
Historically, the SEC could only reward whistleblowers who were involved with insider trading cases. And apparently, they weren’t very generous.
During its 20-year existence, the SEC’s whistle-blower program has paid out only $159,537 to five claimants. No wonder observers of securities fraud have had little incentive to spill the beans. “Basically, [whistleblowing] ruins your life,” says Luigi Zingales, a professor at the University of Chicago Booth School of Business who has studied the issue of whistle-blowers. “What is worth your life getting ruined? It’s pretty expensive.”
Expensive no more?
That’s what many interpret from the new financial reform bill. Besides generous monetary rewards, the new law also greatly expands whistle-blowers’ rights. Now, if you tell on your employer, you are allotted a whopping six years to bring your case to court, as opposed to a mere 90-day statute (the rule under Sarbanes-Oxley).
The National Whistleblowers Center was nice enough to compile everything pertaining to whistleblower protections from the Dodd-Frank Act. Also, our own Jared “Dubs” Wade blogged about the topic — and included a sweet example of his photoshop skills.