Gutting of Dodd-Frank may leave protections for whistleblowers

President-elect Donald Trump, who has vowed to tear down six years of financial regulation, may spare the whistleblowers.

Two Republican lawmakers with sway in the Trump camp, Sen. Chuck Grassley of Iowa and Rep. Jeb Hensarling of Texas, have voiced support for programs meant to reward workers who bring allegations of governmental wrongdoing to U.S. officials.

That gives recent whistleblower rules a degree of political cover that doesn't necessarily extend to other financial regulations made possible by the Dodd-Frank Act of 2010.

'My sense is that unless there's a complete repeal of Dodd-Frank, the whistleblower statute will survive,” said Jill Rosenberg, an expert on employment law and a partner at the Orrick law firm in New York. 'There's been bipartisan support for the bounty program. It hasn't been attacked like regulatory aspects” of the law.

What's less clear is whether the programs will keep their current form or support.

Conservative groups such as the U.S. Chamber of Commerce have been critical of the whistleblower protections, saying they undercut expensive internal compliance programs and pose a conflict between employees' self-interest and the interest of their employers.

Republican policymakers generally are wary of harsh corporate sanctions that are the basis for tipster rewards. Paul Atkins, a former Securities and Exchange Commission commissioner who is leading financial appointments for the incoming administration, is a critic of Dodd-Frank and argues penalties against corporations harm shareholders rather than wrongdoers.

Trump hasn't signaled whether his administration would continue apace with enforcement actions by the Securities and Exchange Commission and Commodity Futures Trading Commission.

At stake is the fate of a whistleblower ecosystem that emerged rapidly after authorities offered anonymity, protection from retaliation and large potential rewards to employees coming forward with allegations of wrongdoing.

Whistleblowers have provided a new pipeline of cases for enforcers while supporting a cottage industry of law firms that bring them.