Whistleblower rules to spawn collateral litigation

Author: Danielle Myles | Published: 1 Jul 2011

The new US whistleblower rules could create an "enormous" amount of collateral litigation, according to some counsel.

Following the rules’ release on May 25, the impact of internal reporting incentives has dominated discussion. But other concerns have arisen as counsel have had time to reflect on the rules, including the sheer number of lawsuits that could arise from a single internal report.

A whistleblower can appeal the Securities and Exchange Commission’s (SEC) refusal to pay a bounty (but not the amount of any bounty paid). Employee whistleblowers that are...