October 23, 2019
Law360 interviews SEC Whistleblower lawyer about potential new whistleblower protections
Congress is considering expanding current SEC whistleblower law to include protections for those who report potential securities violations internally to their employers.
A 2018 U.S. Supreme Court decision held that the current version of the law is limited in that it defines SEC whistleblowers as those who report violations directly to the SEC. As a result, reporting to the SEC is required in order to benefit from anti-retaliation and other protections outlined under the Dodd-Frank Act.
The Whistleblower Programs Improvement Act, which was introduced to the Senate in September after clearing the House in July with a 410-12 vote, would encourage internal reporting by expanding anti-retaliation protections to include those who flagged suspected securities violations by reporting directly up the chain to their employer. The law would also give companies an opportunity to address these concerns and self-report misconduct.
The bill would also require the SEC to decide within a year whether a whistleblower would receive an award, a process that currently can take years.
“It’s a real problem for whistleblowers,” Motley Rice whistleblower attorney, and former SEC counsel, Rebecca Katz, said in an interview with legal publication Law360.
“[The bill] would require them to give the whistleblower a preliminary determination within one year, which would be great,” she added. “That would be a big incentive for whistleblowers.”
The SEC whistleblower program, established by the Dodd-Frank Wall Street Reform and Consumer Protection Act, is currently the only program that ensures complete anonymity of the whistleblower, provided that the whistleblower is represented by an attorney. It covers securities violations such as bribery, insider trading, market manipulation, corporate fraud, and accounting irregularities within a company. Whistleblowers who report such fraud can not only help investors, but may also be eligible for a monetary award. Read more about the SEC whistleblower program.
For more information, contact whistleblower lawyer Rebecca Katz at 212.577.0051.