The U.S. Securities and Exchange Commission’s whistleblower program was established under the Dodd-Frank Act back in 2010. Since then, the program has resulted in several thousand tips called into the agency and 14 awards to individuals who pointed to wrongdoing at their companies, including a record payment of at least $30 million to one whistleblower in September. Clearly, some significant headway has been made by the SEC in putting its program into action. But at the same time, there’s still some room for growth and change.
One way that the world of whistleblowing enforcement at the SEC appears to be evolving is in the area of agreements between employer and employee. The SEC looks to be ready to take companies to task that violate the regulations by putting language in contracts that prevents employees from reporting alleged corporate wrongdoing to the commission. With this in mind, companies need to be very wary of contracts that prevent—or give the appearance of preventing—employees from blowing the whistle.
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