Sarbanes Oxley Section 806 and Whistleblowing
This section of the SOX protects whistleblowers who are working at publicly-traded firms or those who are contractors and subcontractors of these firms. These individuals who provide information about trading, securities, shareholder, bank, accounting fraud are protected under this section even if the whistleblower has not actually given information about the fraudulent acts. The protection is in the form of the prohibition of any retaliatory act on the part of the company on the whistleblower, and if the whistleblower is relieved or terminated, he or she is entitled to reinstatement, lost wages and special damages (Zuckerman Law, 2016).
Dodd-Frank Wall Street Reform and Consumer Protection Act
This Act is a federal law that came into enforcement in 2010. The provisions of this law provide for:
Monitoring the risks in the financial industry;
Performing research on the state of the economy;
Designated the appropriate agencies to handle receivership of bankrupt non-financial institutions and insurance firms;
Previously, many hedge fund and private equity fund managers were not registered as Investment Advisers. Under this Act, they are now required to register as such.
The creation of the Federal Insurance Office under the Department of the Treasury, which is primarily assigned the job of monitoring the insurance industry;
Amends provisions of investment laws to reduce exposures of firms to hedge and private equity funds;
The SEC must make “point of sale” disclosures for retail investors purchasing investment products;
The creation of an Office of Credit Ratings to standardize the credit rating system in the financial industry so as to prevent conflicting credit ratings;
The strengthening of the Asset-Backed Securitization Process, such as the creation of separate rules for the asset classes such as home mortgages, commercial mortgages, and auto loans;
Strengthening the management of the SEC, corporate governance for firms, financial products consumer protection, as well as the Supervision of the Federal Reserve Systems’ Boards of Directors;
New and improved standards for off-balance sheet activities;
Reducing the funds available for the Troubled Asset Relief Program;
Creating minimum standards for mortgages.
Limits on Whistleblowing Awards
References
Securities and Exchange Commission. 2016. Section 922 Dodd-Frank Law. Retrieved from: http://www.sec.gov/about/offices/owb/dodd-frank-sec-922.pdf
Zuckerman Law. 2016. Sarbanes-Oxley Whistleblower Protection Lawyer. Retrieved from: https://www.zuckermanlaw.com/legal-services/sarbanes-oxley-whistleblower/
