Whistleblower Violations

July 11, 2017

Despite Trump Administration Uncertainty, SEC Whistleblower Program Reports Business as Usual

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

October 1, 2016

SEC Orders Half-million Dollar Penalty for Firing Whistleblower

by Silver Law Group

On September 29, 2016, the Securities and Exchange Commission (the “SEC”) announced that casino-gaming company International Game Technology (“IGT”) agreed to pay a $500,000 penalty for firing an employee who reported to senior management and the SEC that the company’s financial statements might be distorted.

The whistleblower retaliation case is the second of its kind since the Dodd-Frank Act authorized the agency to bring retaliation charges. According to the SEC order, the employee had been a director of an IGT division since 2008 and received positive performance reviews throughout his time with the company and never received any sort of discipline or corrective action.

The whistleblower received a favorable evaluation in the 2014 mid-year review and was deemed an employee on the rise, according to the order. Shortly after that review, the whistleblower raised concerns to his managers, to the company’s internal complaint hotline, and to the SEC that IGT’s publicly-reported financial statements may have been misstated. Approximately three months after the whistleblower raised his concerns, according to the order, IGT terminated him.

September 30, 2016

Anheuser-Busch InBev Pays $6 Million to Settle Charges that is Violated Whistleblower Protection Laws

by Silver Law Group

The Securities and Exchange Commission announced on September 28, 2016 that Anheuser-Busch InBev agreed to pay $6 million to settle charges that the company violated the Foreign Corrupt Practices Act (FCPA) and attempted to silence a whistleblower who reported the misconduct.

An SEC investigation found that the company used third-party sales promoters to make improper payments to government officials in India to increase the sales and production the company’s products in India. According to the SEC order, Anheuser-Busch InBev repeatedly ignored employee complaints, had inadequate internal accounting controls to detect and prevent the improper payments, and failed to ensure that transactions involving the promoters were recorded properly in its books and records.

Additionally, according to the order, the SEC found that Anheuser-Busch InBev entered into a separation agreement that stopped an employee from continuing to voluntarily communicate with the SEC about the potential FCPA violations due to a substantial financial penalty that would be imposed for violating strict non-disclosure terms.