National Whistleblower Day

The most important and sweeping financial reform law since the Great Depression, the Dodd-Frank Act, marked its tenth anniversary on July 21.  The Act changed the rules and regulations governing every aspect of the U.S. economy and featured historic whistleblower provisions. In celebration of the anniversary of this momentous Act, Better Markets and The George Washington University Law School co-hosted “Ten Years After Dodd-Frank,” a virtual conference.  The conference featured welcoming remarks by President Barack Obama, a keynote panel discussion between Christopher A. Dodd and Barney Frank, and a closing keynote speech by Senator Elizabeth Warren.  Other speakers and panelists included former Citigroup CEO John Reed, former Federal Deposit Insurance Corporation (FDIC) chair Sheila Bair, former Deputy Secretary of the U.S. Treasury Department Sarah Bloom Raskin, and Representative Maxine Waters (D-CA).  A full video of the conference is available here.

The Dodd-Frank Act was crafted in response to the 2008 financial collapse.  In order to prevent future collapses, the bill completely overhauled financial regulatory practices in all aspects of the economy. In short, the Act was meant to re-regulate the financial sector following decades of deregulation.

In his welcoming remarks, President Obama summed up his administration’s viewpoint in crafting the legislation: “We believed our financial system only works, our market is only free when there are basic safeguards in place to prevent abuse, check excess, and ensure that it is more profitable to play it by the rules than to game the system. And our reforms worked, providing a sturdier foundation to help our financial system weather a future crisis, helping to unleash the largest string of private sector job creation in American history.”  He concluded his remarks by giving thanks “not just to those who helped make these reforms real, but all those who are still fighting to improve the law where we can and safeguard it for the years and decades ahead.”

The keynote panel discussion of the conference featured the two sponsors of the Act, former Senator Christopher A. Dodd and former Representative Barney Frank.  Stephanie Ruhle, the host of MSNBC Live, moderated the panel.  Dodd and Frank began by detailing the contentious fight to get the bill passed.  According to Frank, the bill quickly became a partisan matter despite the bipartisan ideals of the bill. The bill eventually passed by a narrow margin in a vote that mostly ran along partisan lines (with the Democrats voting for and the Republicans against).  Dodd and Frank continued the panel by championing the successes of the Dodd-Frank Act . However, they noted that updates still need to be made to current financial regulations, particularly in response to the current economic crisis related to the COVID-19 pandemic.

The following speakers elaborated on the specific aspects of the Dodd-Frank Act, from its effects on the Federal Reserve to how the Act protects consumers.  However, two main themes ran through all these different speeches.  First, each speaker emphasized the importance of strong financial regulations and honest and capable financial watchdogs in order to fight corruption and abuses of power within the financial industry.  According to former Deputy Secretary of the U.S. Treasury Department Sarah Bloom Raskin, the Dodd-Frank Act “expanded our notions of why financial guardrails matter.”  Secondly, all of the speakers recognized the dedicated efforts of Congressmen Dodd and Frank fighting for the bill’s passage.  Rep. Maxine Waters described Frank as “one of the greatest leaders of this Congress.” and referred to him as a mentor.

Senator Warren closed out the conference with a speech during which she championed the Dodd-Frank Act as a historic piece of legislation that ensured that the economy served the American people as a whole and not just the select few in power.  Discussing the Consumer Financial Protection Bureau, Warren said, “We created a watchdog capable of looking out for middle class families. A watchdog that could get rid of tricks and traps. A watchdog that could cut away reams of fine print that took away consumers’ rights. A watchdog to hold financial institutions accountable when they break the law.”

The Dodd-Frank Act’s key components are the several whistleblower provisions that have completely changed corporate whistleblower law in the United States.  In crafting the bill, Congress recognized that whistleblowers are an essential tool in fighting financial fraud and corruption. Thus, the Senate Banking Commission worked directly with whistleblower attorneys in writing legislation that both incentivizes and protects whistleblowers.  The Dodd-Frank Act contains eight separate sections that created or enhanced corporate whistleblower rights.  Some of these vital provisions include: a mandate entitling qualified whistleblowers the right to a monetary award, a broad “related action” provision that permits the payment of whistleblower rewards based on sanctions obtained from other law enforcement agencies, a provision which requires the maintenance of whistleblowers’ confidentiality and allows for anonymous filings, and a strong anti-retaliation law that allows whistleblowers to file retaliation cases in U.S. District Court and obtain double back wages.  The Dodd-Frank Act also required the establishment of the Securities and Exchange Commission (SEC) Whistleblower Program and the Commodity Futures Trading Commission (CFTC) Whistleblower Program.

In the past decade, the whistleblower provisions of Dodd-Frank have proven to be extremely effective.  The SEC’s Office of the Whistleblower has received thousands of high-quality whistleblower allegations about ongoing financial fraud and securities violations each year.  SEC whistleblowers, who provide the agency with original information that aids in a successful enforcement action, are entitled to a whistleblower reward ranging from 10-30% of funds recouped by the government.  The SEC Whistleblower Program has granted whistleblower rewards totaling over $500 million, including a record-setting $50 million award given earlier this year.

Read:

Transcription of Former President Obama’s Welcoming Remarks at the Ten Years After Dodd-Frank Event on July 21, 2020

Ten Years After Dodd-Frank Whistleblowers Paid $500M-Plus