Any time new compliance legislation surfaces, inside counsel should evaluate whether existing e-discovery technology and processes are adequate. This analysis is particularly important when evaluating your company's response to the Dodd-Frank Act, which adds significant financial incentives for whistleblowers to go straight to the Securities and Exchange Commission (SEC) with complaints without first going through internal channels.

Enacted July 21, 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act is the most comprehensive U.S. financial reform since the 1930s. In May 2011, the whistleblower provisions were approved and went into effect in August. Often referred to as the “whistleblower bounty program,” the provisions were designed to incentivize an individual with knowledge of potential securities violations to come forward for the opportunity to receive a windfall payment of 10 percent to 30 percent of the SEC's recovery.

Penalties imposed by the SEC often range from tens to hundreds of millions of dollars. The new provisions supplement existing whistleblower administrative enforcement procedures under the Sarbanes-Oxley Act of 2002 and amends the Securities Exchange Act of 1934 create a new whistleblower incentive program.