“The Whistleblower Improvement Act of 2011,” a new bill which would amend the whistleblower program under the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”), was introduced by Representative Michael Grimm (R-NY) on July 11, 2011. The new bill addresses the concern that the whistleblower program of the Dodd-Frank Act, as it currently stands, will undermine internal compliance programs as there is no requirement in the statute that employees first report potential securities violations to the employer before going to the U.S. Securities and Exchange Commission (“SEC” or “Commission”). With limited exceptions, the proposed legislation would require employees to first report any misconduct through the employer’s internal reporting system before going to the Commission. As we previously reported, the Final Rules implementing the Dodd-Frank Act whistleblower program became effective on August 12, 2011.
Tagged: U.S. Securities & Exchange Commission
Publicly traded employers should be aware that the U.S. Securities and Exchange Commission (“SEC”) recently adopted Final Rules implementing the whistleblower program under the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Act”). Consistent with the Final Rules, which become effective on August 12, 2011, employers should not interfere with an employee’s efforts to communicate with the SEC or take any adverse actions against an employee for exercising his or her rights under the whistleblower program. In addition, employers should have clear policies in place for employees to be able to report any perceived violations of federal securities laws and employees should be trained on the procedures for reporting any such violations. The Act creates a private right of action for whistleblowers who have suffered retaliation and remedies include reinstatement, double back pay with interest, litigation costs, expert witness fees, and reasonable attorney’s fees.