As Dodd-Frank Nears Completion, Whistleblowers Are Proving a Key Component

SAN FRANCISCO, Feb. 7, 2014 /PRNewswire-iReach/ -- Nearly three and a half years after it was signed into law by President Barack Obama, the Dodd-Frank Wall Street Reform and Consumer Protection Act saw its last major component implemented in December: the so-called Volcker Rule. With the issuance of that measure, which prohibits banks from speculating with their own money, Dodd-Frank's landmark overhaul of the way financial institutions are regulated -- and operate -- is largely complete. And already, the impact of the legislation is being felt -- helping to spur transparency and reduce risk, and beat back fraud and other improper activities.

One of the chief means by which Dodd-Frank combats wrongdoing is through the whistleblower program it established within the Securities and Exchange Commission. Overseen by the SEC's Office of the Whistleblower, the program incentivizes insiders to speak out about fraud and other illegal activities by awarding them a portion -- between 10 and 30 percent -- of the monetary sanctions the SEC ultimately collects (in enforcement actions where sanctions exceed $1 million). In the 2013 fiscal year, the SEC received 3,238 whistleblower tips -- up from 3,001 in 2012 -- and the agency paid more than $14 million in whistleblower awards.

"Dodd-Frank saw what an increasing amount of states and federal agencies are seeing, that whistleblowers can be an extremely effective weapon in the fight against fraud," says Jeffrey F. Keller, a founding partner at Keller Grover, a nationally recognized labor and employment law firm, and a veteran whistleblower lawyer. "Particularly in the world of financial services, insiders are privy to the details outsiders -- and all-too-often regulators -- don't have access to. They know or suspect that something wrong is going on. But speaking out about it isn't always so easy, especially when it's your employer that may be acting improperly. Whistleblower programs give these individuals the support to do the right thing -- and they have proven remarkably successful at getting results."

Indeed, the gold standard of whistleblower statutes, the federal False Claims Act, has led to the recovery of more than $34 billion in improperly paid government funds since it was significantly modified in the mid-1980s. That statute, which targets fraud and other wrongdoing committed against the U.S. government, has reduced and reversed fraud in areas such as Medicaid/Medicare, defense spending, and pharmaceuticals.

"Whistleblowers can be a potent weapon against any kind of fraud -- something the SEC is discovering as the tips, and the enforcement actions they spur, increase," says Keller, whose firm has offices in Los Angeles and San Francisco. "Dodd-Frank may give us a host of measures that ultimately benefit consumers and taxpayers, but make no mistake: Its embrace of whistleblowers will be among the most crucial."

For related news from Keller Grover visit http://www.kellergroverwhistleblowerlawyers.com/news.

Media Contact: Jeffery Keller, Keller Grover, LLP, 866.486.1537, [email protected]

News distributed by PR Newswire iReach: https://ireach.prnewswire.com

SOURCE Keller Grover, LLP