The North American Securities Administration Association (“NASAA”) adopted a model act for state legislators to consider for enactment. The model act is fashioned after the Federal Dodd-Frank Act that created the SEC’s Office of the Whistleblower. Both the federal law and the new model act prohibit retaliation against and offer incentives to individuals that provide “original information” regarding securities law violations.
It will be interesting to see how many and how quickly state legislatures adopt the model act. Most of us that routinely represent whistleblowers understand that the SEC is over-burdened and years behind in vetting and issuing whistleblower awards. Most important, it will be interesting to see if cash-strapped states actually appropriate funding to the state regulators if and when they adopt NASAA’s new model act[1]. Food for thought.