The Securities Exchange Commission Thursday details the changes to whistleblower protection under the newly-passed Dodd-Frank Act. In a 181-page set of Proposed Rules, the regulator clarified aspects that define a whistleblower and suggested terms under which a whistleblower would be rewarded. The proposed rules come only days after the SEC said it set aside $452 million for anticipated whistleblower claims. The SEC rules do less to establish a definition of a whistleblower and more to define what one is not. Dodd-Frank prohibits anyone convicted of crimes related to a corporate violation from receiving any rewards form a case. The SEC’s rules claim that people who cannot receive a whistleblowing reward if:

• they provide information after the SEC has already made a demand from a company

• they provide information legally protected by attorney-client privilege or securities laws

• are legal, compliance, audit, supervisory or governance personnel with whom the information was trusted in order to find a valid solution

• they obtained the information in violation of state or federal criminal law

The SEC said a whistleblower can remain anonymous as long as an attorney can verify their identity. However, if it is required in federal court, a whistleblower’s identity must be revealed. The SEC also holds authority to share identity information with other domestic and foreign regulatory enforcement agencies. The SEC said in its proposed rules that any action to sway a whistleblower from reporting a violation is completely prohibited. “This prohibition includes attempting or threatening to enforce a confidentiality agreement against the whistleblower,” the rules said. The SEC has initiated a comment period for the proposed rules that runs through Dec. 17, 2010. Issuance of the final regulations is scheduled for April 2011. Write to Christine Ricciardi.