The whistleblower and bounty hunter provisions of the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act ("Dodd-Frank") make internal auditing, reporting and compliance programs more important than ever for covered employers. The SEC regulations implementing Dodd-Frank (the Final Rules), released on May 25, 2011, clearly illustrate that the government's objective is to stimulate reporting of violations of the federal securities laws through financial incentives to individuals—usually employees—who discover such violations. The Dodd-Frank regulations are—above all—a law enforcement tool that signals a fundamental change in the SEC's approach to corporate corruption. Only ten years ago, Congress passed the Sarbanes-Oxley Act of 2002 ("SOX") in response to the breakdown in internal corporate controls, demonstrated most dramatically in the Enron prosecution. Dodd-Frank is a step farther on that continuum. No longer content with the enhanced self-governance approach of SOX, the SEC now puts the fear of prosecution into the boardroom and executive suite by incentivizing employees of every covered employer to expose corruption for a price. In addition, Dodd-Frank provides enhanced employment protection for the whistleblower providing the information.

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