Daily Management Review

SEC expands its Whistleblower Program


12/26/2016


The Securities and Exchange Commission (SEC) of the USA has tightened the grip on companies that are trying to restrict activities of informants. New rules imply ban of labor contracts that threaten an employee with dismissal in case of informing government agencies in irregularities in the company.



Steven Depolo
Steven Depolo
Earlier in December, SEC issued two decisions on penalties against such offenders - energy company SandRidge Energy Inc. Oklahoma ($ 1.4 million) and advertising company NeuStar Inc. for $ 180 thousand. Over the past 2 years, the Commission has considered five similar cases.

"This issue will be central to my office in 2017, and I look forward to consideration of additional cases in the framework of our mandate," - said Head of SEC management for interaction with informants Jane Norberg in an interview with The Wall Street Journal.

"Public companies are not allowed to include in the contract provisions that ban informing the Securities and Exchange Commission about violation of current laws and regulations," - Antonia Chion, Deputy Head of SEC’s division responsible for execution of the rule of law, commented the decision.

SEC has rewarded informants since 2011. According to the law, volunteers-informants, if their information on violations of the law were confirmed, should receive 10-30% of the amount of fines, which eventually pays the offending company. The largest payout amounted to $ 30 million. 

source: wsj.com






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