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Dodd-Frank Wall Street Reform And Consumer Protection Act (Part II)

On July 21, 2010, President Obama signed into law the Dodd-Frank Wall Street Reform and Consumer Protection Act ("WSRCPA"). This post is the second in a five-part series on the employment law provisions of the WSRCPA. This post examines Section 922 of the WSRCPA, which amends the Securities Exchange Act by providing a financial award for whistleblowers and protection from retaliation. Whistleblower award. Section 922 provides an award for whistleblowers who voluntarily provide original information to the Securities and Exchange Commission ("Commission") that leads to the successful enforcement of an action brought by the Commission and results in monetary sanctions of more than $1,000,000.  The amount of the award to the whistleblower will range between 10% and 30% of the monetary sanctions collected by the Commission. The award is not available to, among others, a person convicted of a crime related to the unlawful action made the basis of the whistleblower report, employees of a self-regulatory agency, the Department of Justice or other law enforcement organization.  An applicant for an award has 30 days to appeal a determination made by the Commission, and the appeal must be filed in the appropriate court of appeals of the United States. There is also a confidentiality provision in Section 922 designed to protect the identity of the whistleblower during the investigation. Anti-Retaliation Provision. No employer may threaten, harass, discriminate against or discharge a whistleblower for having provided information to the Commission or for assisting in an investigation or proceeding initiated by the Commission related to such information.  An aggrieved whistleblower must file a lawsuit in federal district court within three years of when he knew or should have known of the facts "material to the cause of action" but not more than six years after the violation occurred.  The remedies available to a prevailing whistleblower include reinstatement with bridged seniority, two times the amount of back pay and interest owed to the whistleblower, and including attorney's fees, costs and expert witness fees. The Commission is given authority to prohibit by regulation the enforceability of pre-dispute arbitration agreements for such claims, and there is a provision prohibiting the preemption of other claims the whistleblower has under state or federal law. The takeaway. Section 922's amendments to the Securities Exchange Act are almost identical to Section 748's amendments to the Commodity Exchange Act previously discussed here, with a few exceptions.  The remedies under Section 922 include double back pay and the statute of limitations are longer than those under Section 748.  However, agreements for pre-dispute arbitration are not prohibited under Section 922, although the Commission has the authority to prohibit them in the future.  GSF

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