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Whistleblowers and Dodd-Frank: Compliance and Internal Strategy

By Gabriella Khorasanee, JD on November 22, 2013 | Last updated on March 21, 2019

While whistleblower laws have been in existence for some time, the passage of Dodd-Frank has changed the legal landscape for dealing with whistleblowers. The SEC has created incentives for whistleblowers, including rewards, and anti-retaliation measures. Because of these incentives, we're likely to see an increase in whistleblower cases.

The ACC Docket published an article, "Strategies for Keeping a Whistleblower In-House," and we were inspired to share some ways that your legal department should prepare for, and train employees for dealing with whistleblowers.

As in most cases, the most valuable thing you can do for your company is be prepared.

1. Corporate Culture

Your company's corporate culture, from the top down, should be one that fosters openness and communication. If management makes compliance a priority, employees at all levels will follow management's example. Access to information, such as posters with hotline numbers or reporting instructions, in central areas where employees will see them is a great way to instill a corporate culture of compliance.

2. Compliance Procedures

Whether a whistleblower investigation is initiated internally, or with the SEC, your company should have compliance procedures in place. Not only that, but your company should also have procedure for dealing with whistleblower allegation investigations, such as handling inquiries and document requests.

3. Time Is of the Essence

Timely response to compliance issues and whistleblower allegations is imperative. If the issue is reported internally, your company may be able to handle the situation quietly if it is swift in addressing and resolving the issues. Not only that, but your company will also be able to exercise "greater control over the situation."

4. Training

As with all corporate procedures, the plans you put in place are only as strong as the training you provide. All employees should be trained on how to make internal complaints, and on the flip side, need to be trained on the requirement of anti-retaliation against whistleblowers.

While it is impossible to shield your company from any potential whistleblower actions, if your company has an effective plan in place to handle investigations, whether they are initiated internally or not, your company will be "better positioned to mitigate adverse impacts or protect against enforcement action by the SEC or other government entities."

Does your company have procedures in place to deal with whistleblower complaints? How does your company deal with whistleblower complaints? Let us know on LinkedIn.

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