The Commodities Future Trading Commission (CFTC) has proposed a series of regulations to implement the Dodd-Frank Wall Street Reform and Consumer Protection Act. Members of the public are invited to comment on the proposed whistleblower regulations until February 4, 2011.
We can expect a replay of the conflict generated by the rulemaking of the Securities and Exchange Commission (SEC). Industry representatives wanted the SEC to establish exclusions, limits, reductions and hurdles for whistleblower rewards. They wanted to regulate the fees of whistleblower attorneys and threaten those attorneys with sanctions. You can read our prior blog posts about this controversy here and here. The National Whistleblowers Center prepared a report showing that whistleblower rewards encouraged the detection of fraud and did not hinder internal compliance programs. We also submitted comments on the SEC regulations. Hopefully, the CFTC will not be swayed by the SEC's proposed rules, and will take a fresh look at what regulations will actually encourage employees to come forward with information to assist in the detection of frauds and other violations.