The Dodd-Frank Wall Street Reform and Consumer Protection Act, which was enacted in 2010 in response to the 2008 financial crisis, added protections for whistleblower activity to the Securities Exchange Act of 1934 (“Exchange Act”). Specifically, Section 21F of the Exchange Act and the related Securities and Exchange Commission (SEC) rules (collectively, “Section 21F”), provide protections to employees and other persons who report possible violations of securities laws to the SEC. Section 21F created a bounty program whereby, if a whistleblower’s tip leads to an enforcement action, then, in some cases, the whistleblower can receive a percentage of the sanctions collected by the SEC. Section 21F also prohibits any action that could “impede an individual from communicating directly with the [SEC] staff about a possible securities law violation, including enforcing, or threatening to enforce, a confidentiality agreement…with respect to such communications.”[1]
The SEC has brought over 32 enforcement actions against both public and private companies for violations of Section 21F, with many actions alleging that provisions in certain agreements between the companies and their employees impeded the employees from reporting possible violations to the SEC. For example:
On July 2, 2025, the U.S. Department of Health and Human Services (HHS) and the U.S. Department of Justice (DOJ) announced that they are forming the DOJ-HHS False Claims Act Working Group to furthe...