Reporting ESG Violations Under the Dodd-Frank Act and SEC Whistleblower Program
The Dodd-Frank Act includes provisions to protect whistleblowers who report violations of securities laws, including violations related to environmental, social, and governance (ESG) issues. Some examples of ESG violations that may be reported under the SEC Whistleblower Program include:
- Environmental violations: Companies involved in illegal pollution, fail to disclose environmental risks, or violate environmental regulations may be subject to reporting under the whistleblower program. For example, a whistleblower could report a company that knowingly releases toxic chemicals into a nearby water source.
- Social violations: Companies that engage in discriminatory practices, violate labor laws, or engage in human rights abuses may be reported under the whistleblower program. For example, a whistleblower could report a company that knowingly uses child labor in its supply chain.
- Governance violations: Companies that commit financial fraud, misrepresent financial information, or engage in other governance violations may be reported under the whistleblower program. For example, a whistleblower could report a company that falsely represents its ESG practices in order to attract investment.
It’s important to note that these are just a few examples of the types of violations that may be reported under the SEC Whistleblower Program.
Reporting ESG Violations
If you suspect ESG fraud, you should contact a whistleblower attorney to discuss your options. Whistleblowers who report ESG fraud may be eligible for rewards under whistleblower laws such as the Dodd-Frank Act and the Securities and Exchange Commission (SEC) Whistleblower Program. It is important to act quickly, as there may be a limited window of time to report the fraud and qualify for a reward.
Keep in mind, ESG whistleblowers are also protected by various federal and state whistleblower laws, which prohibit retaliation by employers against whistleblowers who report fraud. Whistleblowers who experience retaliation may, in addition to rewards, be entitled to reinstatement, back pay, and other remedies under these laws.
“[Whistleblowers] display extraordinary bravery to expose fraud and wrongdoing, and to shine light in some very dark places. In doing so, they reinforce our fundamental values – that the rule of law matters, and no one is, or should be, above the law… They help create transparency, and from transparency flows crucial accountability.”
Whistleblowers Fight Tremendous Odds and Deserve Better
Statement by Allison as SEC Commissioner, September 23, 2020
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Former Commissioner Allison Herren Lee leads KKC’s groundbreaking efforts to ensure that SEC rules governing environmental ESG issues are strictly enforced, and that whistleblowers who raise ESG issues can benefit from the best representation available anywhere in the United States.
Frequently Asked Questions
Frequently Asked Questions
Some examples of ESG fraud include greenwashing, social impact fraud, and governance fraud. All of these frauds aim to misrepresent a company’s environmental impact and sustainability practices by making themselves appear more environmentally friendly, socially responsible, and transparent and accountable than they really are. It can mislead investors or stakeholders into believing that a company is more sustainable or responsible than it actually is.
Whistleblowers can report ESG fraud by contacting a whistleblower attorney, who can help them prepare a whistleblower complaint and file it with the appropriate government agency. Whistleblowers may also report ESG fraud anonymously in certain circumstances, such as through the SEC Whistleblower Program.
Yes, whistleblowers who report ESG fraud may be eligible for rewards under whistleblower laws such as the Dodd-Frank Act and SEC Whistleblower Program. The amount of the reward depends on various factors, such as the amount of money recovered as a result of the whistleblower’s report and the significance of the information provided by the whistleblower.
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