Discuss how the Dodd-Frank Act affects: (a) the SEC's authority regarding aiders and abettors of securities law violators, (b) whistleblowing, and (c) disclosure requirements in annual proxy statements regarding executive compensation
(a) The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) was signed into law in July 2010 . It extended the authority of the SEC by empowering the SEC to bring enforcement actions under the Securities Act of 1933 against aiders and abettors. It also amends the 1933 and 1934 Acts to allow "recklessness" as well as "knowledge" to satisfy the mental state required for the SEC to bring aiding and abetting cases.
(b) Regarding whistleblowing, the Dodd-Frank Act requires the SEC to make an award to whistleblowers who voluntarily provide original information that leads to a successful enforcement action in which the SEC imposes monetary sanctions of over $1million. The Act also prohibits retaliation by employers against individuals who provide the SEC with information about possible securities violations.
(c) The Dodd-Frank Act requires the SEC to issue rules requiring proxy issuers to describe clearly in annual proxy statements information that shows the relationship between executive compensation actually paid and the financial performance of the issuer. The Act also requires the SEC to issue rules requiring the disclosure of the median of the annual total compensation of all the issuer's employees except the CEO, the annual total compensation of the CEO, and the ratio of these two figures.
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