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New Securites Fraud Whistleblower Rules Poised to Take Effect

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Set to go into effect on August 12, 2011, new whistleblower reform will amend the Securities and Exchange Act of 1934, by allowing the SEC to offer award to individuals who provide original information about federal security regulation violations, if the information submitted leads to the successful enforcement of an action that results in monetary sanctions of more than $1 million. The award would equal 10 to 30 percent of the sanction.

“Supporters of the provision say it provides needed protection to whistleblowers, who may be subjected to retaliation for speaking up. Were internal reporting to be required, some might be forced to come forward with their allegations to the wrongdoers themselves. Opponents say that the provision encourages whistleblowers to bypass internal compliance programs, often established by companies at great cost,” CFO World said.

An attorney who represents both whistleblowers and companies said that when an employee is considering whether or not to come forward,  “there’s nothing for employees to gain in terms of job security,” he says. “The reality is that there will be cover-ups, their complaints will be ignored and they’ll lose their jobs.”

breakinglawsuitnews.com disclaimer: This article: New Securites Fraud Whistleblower Rules Poised to Take Effect was posted on Tuesday, August 2nd, 2011 at 5:55 pm at breakinglawsuitnews.com and is filed under Fraud Lawsuits.

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