Even with political clouds of uncertainty from the Trump administration, the head of U.S Securities and Exchange Commission is moving the agency full speed ahead, all the while chastising companies that retaliate or discourage their employees from blowing the whistle on possible securities violations.
Last month, Jane Norberg; the current chief of the SEC’s Office of the Whistleblower spoke on a panel at the Practising Law Institute on Corporate Whistleblowing. During the panel, she told attendees that they could expect the same level of enforcement and investigation as in years past.
Open for business
“From my point of view, the SEC’s whistleblower program is open for business and we are moving forward as we have in the past” – Jane Norberg Chief of the Office of the Whistleblower
Also highlighting the successes of the Whistleblower program since it’s inception via the Dodd-Frank Act, Norberg noted nearly 18,000 tips have been received and that approximately $154 million in awards had been paid out to tipsters. These tips have resulted in $1 billion in fines and penalties being collected by the SEC from Dodd-Frank act violator’s.
Even though the SEC is in transition under its new chair, Norberg assured attendees that the Whistleblower program is “Still moving forward” and that the SEC is receiving tips “Just as rapidly as we have in the past.”
Also emphasized on Norberg’s call, is the SEC’s continued scrutiny of severance packages and employment packages that may possibly prevent employees from reporting alleged violations to the SEC. Norberg said that the SEC has brought enforcement actions against 9 organizations so far for having restrictive employment contracts.
Rule 21F-17 prohibits companies from writing or structuring any employment agreements/contracts that impede any individual from communicating with SEC staff about securities law violations.
The SEC will also be stepping up its monitoring efforts to ensure that there is no internal retaliation at companies. Norberg noted that the SEC had enforced 3 penalty actions against organizations that had retaliated against internal whistleblowers.
Norberg referenced a recent US Supreme Court ruling that reinforced that the Dodd-Frank anti-retaliation statutes should be applied to internal whistleblowers who have not yet reported their tips to the SEC. Referring to the issue as “Ironic”, as the same companies and organizations who argued that Dodd-Frank anti-retaliation regulations should only apply to SEC whistleblowers had spurred Congress and the SEC to action requiring internal reporting in the Dodd-Frank Act.
“… Be careful what you wish for,” Norberg stated, “(Because)… the very first-time companies hear about a securities violation may be when the SEC knocks on their door.”
The SEC whistleblower program offers confidentiality, protection from retaliation, and rewards fraud tipsters for reporting wrongdoing that leads to a SEC enforcement action in which over $1 million in sanctions is collected. The award can range anywhere from 10 to 30 percent of the sanctions, according to the website.
Scott L. Silver, the managing partner of the Silver Law Group, was an early proponent of the legislation and authored a primer on the SEC Whistleblower Program. Our legal team includes David R. Chase, a former SEC prosecutor now working to protect whistleblowers.
Silver Law Group and The Law Firm of David R. Chase are committed to the protection of whistleblowers through the SEC whistleblower claim process and can prosecute your whistleblower claims. If you have questions about your legal rights as a whistleblower, please contact Scott Silver of the Silver Law Group for a free consultation at ssilver@silverlaw.com or toll-free at (800) 975-4345.