Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) is about to celebrate its fifth anniversary. The Act, considered by some to be the most far-reaching Wall Street reform in history, was enacted on July 21, 2010, in response to the financial crisis that began in 2007.
Contained within the 849 pages of content that address the reform, governance, oversight, and supervision of financial institutions and their regulators are provisions for whistleblower incentives and protection,including the by now familiar language advising that “No employer may discharge, demote, suspend, threaten, harass, directly or indirectly, or in any other manner discriminate against, a whistleblower in the terms and conditions of employment because of any lawful act done by the whistleblower …”
This year, as in years past, there are some congressional calls to simplify the massive Dodd-Frank Wall Street Reform and Consumer Protection Act and even some to repeal it—an unlikely event. Whether or not any of the bills introduced so far this year to modify Dodd-Frank are able to pass (and President Obama vows he will veto them if they reach his desk), the whistleblower provisions will stand; none of the bills modifies that language.
Former Senator Chris Dodd, the law’s co-author, thinks the law, including its whistleblower provisions, is doing pretty well on the eve of its fifth anniversary.
He recently spoke with Investment Advisor about Dodd-Frank today. He says he thinks the bill is working pretty well and that the “architecture of our financial system” is on far better footing than it was during the financial crisis that motivated passage of the bill.
Asked if he thinks there’s a need for further measures beyond Dodd-Frank he said, “There may be in time. … I wrote a bill, and I never met a perfect one in the 36 years that I sat in Congress. I don’t care if a bill is a page long; I promise you there are things that you didn’t get exactly right.”
The SEC Office of the Whistleblower, authorized by the Dodd-Frank Act, is one of the many things he thinks is working well. It has already demonstrated its value, he says. “You can’t rely on well-intended regulators to find things out, but honest people working in the financial services sector, when they see something they think is terribly wrong, they can actually go directly to the regulator instead of going through the company.”
Ethical Advocate believes that it should be easy and desirable for people to go through their company as well as directly to regulators. Internal reports are often the first indication of wrong doing, and enable organizations to respond appropriately. We believe that organizations with a strong ethics culture encourage internal reporting, often through an ethics hotline, and protect whistleblowers from retaliation.
Please contact Ethical Advocate if you have questions about how to set up and manage an ethics and compliance hotline or program.
“Chris Dodd and Barney Frank: Wall St.Reformers—The 2015 IA 35 for 35,” ThinkAdvisor blog, May 9, 2015. http://www.thinkadvisor.com/2015/05/09/chris-dodd-and-barney-frank-wall-st-reformers-the?page_all=1
Dodd-FrankWall Street Reform and Consumer Protection Act, Public Law 111-203, July 21, 2010. http://www.gpo.gov/fdsys/pkg/PLAW-111publ203/pdf/PLAW-111publ203.pdf