Last year the Securities and Exchange Commission received 3,001 tips of fraud and other financial improprieties under the Dodd-Frank Wall Street Reform and Consumer Protection Act. The act, which was enacted in 2010, gives whistle-blowers 1030 percent of fines collected by the government that are more than $1 million. So far, however, there’s only been one payout. Last August, an undisclosed whistle-blower received an initial payout of $50,000, a figure that will increase as more of the sanction is paid. But more payouts are expected to follow. While the SEC declined to provide the specific numbers of the tips it has received that could result in awards, according to its annual report, 143 enforcement judgments and orders issued in fiscal year 2012 may qualify under the agency’s guidelines.
In the meantime, however, the provisions have already proven lucrative for one group: attorneys at Am Law 200 firms, who have been brought in to represent companies facing these government actions, as well as companies that are taking proactive measures to avoid the ire of the government. Crowell & Moring, Foley & Lardner, Orrick, Herrington & Sutcliffe, and Seyfarth Shaw are among the firms that have experienced an increase in whistle-blower-related engagements as a result of the new law.
