Protecting Against Whistleblower Complaints

April 20, 2011

Under the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”), the United States Securities and Exchange Commission (“SEC”) can compensate whistleblowers if they provide original information about a securities law violation.  Further, the Dodd-Frank Act gives whistleblowers protection from employer retaliation for making disclosures that are required under all rules, laws, and regulations subject to the SEC’s jurisdiction. 

While supervised persons are already required to report securities law violations to the firm pursuant to Rule 204A-1 of the Investment Adviser Acts.  Implementing detailed policies and procedures for dealing with customer and employee complaints can reduce the risk of a whistleblower complaint against your firm.  To fully comply with the requirements of the Dodd-Frank Act, these policies and procedures should create a system where employees can submit written complaints to your and your firm can later verify that the employee feels he or she was not retaliated against for making the complaint.

RIA Compliance Consultants can help your firm update its written supervisory to address employee complaints.  Internally addressing any employee complaints reduces the risk that the employee would go to a securities regulator.  So, click here to schedule a time to speak with one of our compliance consultants about updating your written supervisory procedures and reducing the likelihood of a whistleblower complaint against your firm.

Posted by Bryan Hill
Labels: Whistleblower