Whistleblower News

Bipartisan Group of Senators Introduce Major Reforms to Securities and Commodities Whistleblower Law

24
September 2019

Washington, D.C. September 24, 2019. Yesterday, a bipartisan group of Senators introduced the “Whistleblower Programs Improvement Act.” The bill contains significant improvements to the whistleblower reward and anti-retaliation provisions of the Dodd-Frank Act.

The bill, sponsored by Senators Chuck Grassley (R-Iowa), Tammy Baldwin (D-Wis.), Joni Ernst (R-Iowa) and Richard Durbin (D-Illinois), contains the following amendments to the Security and the Commodity Exchange Acts:

-Requires the Securities and Exchange Commission and the Commodity Futures Trading Commission to issue rulings on whistleblower reward cases within one year of the filing of applications for a reward;

-Protects securities fraud whistleblowers who report violations of securities or commodity trading laws internally to their managers or compliance programs from retaliation;

-Prohibits mandatory arbitration in Dodd-Frank Act whistleblower retaliation cases filed in federal court.

Stephen M. Kohn, a partner in the whistleblower law firm of Kohn, Kohn, and Colapinto and the Chairman of the Board of Directors of the National Whistleblower Center, issued the following statement in support of the bill:

“The Whistleblower Programs Improvement Act is essential to ensure that Wall Street whistleblowers are protected and that corporate crooks can be held accountable.”

“The long delays in issuing rewards under the Dodd-Frank Act are seriously harming whistleblowers and the credibility of the Dodd-Frank Act whistleblower reward laws. Whistleblowers often have to wait over 4-years to obtain a reward, many living in poverty after being fired. This delay is unacceptable, and the Whistleblower Programs Improvement Act will fix this injustice.” 

“The bill will also fix two other major problems with the current law. It will end mandatory arbitration in securities whistleblower cases and protect whistleblowers who report violations internally to their managers. Forcing whistleblowers to litigate their wrongful discharge cases in corporate-controlled mandatory arbitration proceedings is the kiss of death for most whistleblowers. Mandatory arbitration denies whistleblowers their day in court.”

“Most employees report securities violations to their employers before going to the SEC. This bill will ensure that employees who make internal reports have full protection against retaliation. The bill will fix a loophole in the current law that permits companies to fire whistleblowers who raise internal complaints but do not also directly report these violations to the SEC. This distinction undermines compliance efforts and has resulted in numerous firings.

Kohn worked with Congress assisting with drafting the original Dodd-Frank Act whistleblower provisions. Then, after the law was passed, he worked extensively on trying to improve the Dodd-Frank Act in court, before Congress and in rulemaking proceedings within the SEC.

Related Links:

Whistleblower Programs Improvement Act

Amicus Brief of NWC in Digital Realty Case

Photo courtesy of Gage Skidmore

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