Bill Would Amend Dodd-Frank Whistleblower Program

“The Whistleblower Improvement Act of 2011,” a new bill which would amend the whistleblower program under the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”), was introduced by Representative Michael Grimm (R-NY) on July 11, 2011. The new bill addresses the concern that the whistleblower program of the Dodd-Frank Act, as it currently stands, will undermine internal compliance programs as there is no requirement in the statute that employees first report potential securities violations to the employer before going to the U.S. Securities and Exchange Commission (“SEC” or “Commission”). With limited exceptions, the proposed legislation would require employees to first report any misconduct through the employer’s internal reporting system before going to the Commission. As we previously reported, the Final Rules implementing the Dodd-Frank Act whistleblower program became effective on August 12, 2011.