|  | | 2011 News and Press Releases | | |
HEADLINE NEWS:
Bill Would Require Whistleblowers To Report Alleged Violations to Firms First
Stephen Joyce
The Bureau of National Affairs. July 18, 2011
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EXCERPT Rep. Michael Grimm (R-N.Y.) and three co-sponsors introduced the Whistleblower Improvement Act (H.R. 2483) following the SEC's adoption of rules implementing its whistleblower program. Whether to require whistleblowers to report internally before approaching the SEC was the most controversial aspect of the SEC's final rule, which was opposed by the commission's two Republicans and some business interests. Grimm announced his intention to introduce legislation overturning the SEC's rule the day it was adopted. An SEC spokeswoman July 12 declined to comment on the bill. In a July 12 letter it sent to a bill co-sponsor, the Bond Dealers of America said it supports the Grimm bill. Similarly, U.S. Chamber of Commerce Executive Director for Financial Reporting Policy and Investor Opportunity Thomas Quaadman told BNA July 12 that his organization supports the bill because it will allow internal corporate compliance programs a chance to work. The proposed legislation would require that to be eligible for a bounty, employees who provide information related to alleged misconduct of their employers to report the information to their employers before reporting the information to the SEC. The bill would not require internal reporting in instances where there is evidence the alleged misconduct was committed by or involved the complicity “of the highest level of management” or “other evidence of bad faith on the part of the employer.” It also would sharpen rule language prohibiting culpable individuals from claiming whistleblower bounty. The proposed legislation also would require the SEC in many cases to inform a company it has information from a whistleblower and is investigating the alleged violative behavior before any enforcement action is taken; this would allow the company time to remediate the alleged violation. [...] |
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