WHISTLEBLOWERS—A CASE STUDY IN THE REGULATORY CYCLE FOR FINANCIAL SERVICES

The Securities and Exchange Commission and the Commodity Futures Trading Commission were directed by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank) to create whistleblower protection programs that reward informants with massive bounty payments. At the time of its passage, the Dodd-Frank Act was a highly controversial statute that was passed on partisan lines. Its whistleblowing authority was one of its “most contentious provisions.” As the result of the 2016 elections, the Dodd-Frank Act has come under renewed attack in Congress and by the new Trump administration. The stage is being set for possible repeal of major parts of that legislation, including its whistleblowing provisions.

The scope of this anti-retaliation prohibition has also just been narrowly interpreted by the Supreme Court. This Article shows why the Dodd-Frank whistleblowing authority was ill-considered, how its present application undercuts other regulatory programs that seek to prevent and deter violations, and proposes some reforms.