People within all industries in California try to make as much money as possible and sometimes it is easier to do this if they do not follow the law. The laws are in place to make sure the system is fair for everyone and sometimes there are advantages to not playing by the rules. After the recession, they was great concern over what led to it and the government felt that there needed to be much greater oversight over the financial system. As a result there were major changes to the Dodd-Frank Act to protect consumers.
These protections for consumers can mean that it may be a little more difficult to do business, which was the intention of the new law. So, financial institutions may want to break these laws in order to make is easier to do business and ultimately make more money. The government cannot always regulate these laws as closely as they would like though. Therefore, they give employees and others with knowledge of the violations incentive to report the violations.
These are known as whistleblower protections. The law states that if a person provides original information of a violation that results in sanctions of over $1 million, he or she receives a portion of the money recovered by the government. The percentage that the whistleblower may receive is between 10 percent and 30 percent of the amount recovered. Also, the employer is prohibited from taking any whistleblower retaliation against the employee for providing the information. This means they cannot fire them, demote, harass, threaten or take other related actions against them.
The government clearly does not want financial institutions within California to violate the Dodd-Frank act. If they do, they are a number of penalties the government can enforce against them. However, before they can enforce the law, they need to know that there has been a violation. That is why there are incentives given for employees who report the violations. These employees have rights and experienced attorneys may be able to help ensure they are protected.
Source: www.sec.gov “Subtitle B – Increasing Regulatory Enforcement and Remedies – Sec. 922. Whistleblower Protection” accessed on Nov. 22, 2017