Mar 03

Print this Post

SEC defends internal company whistleblowers

The Securities Exchange Commission (“the Commission”) has filed an amicus brief clarifying that whistleblowing employees should be protected under the Dodd-Frank Wall Street Reform and Consumer Protection Act even if their whistleblowing report was only internal.  In its brief, the Commission stated that it

“interpreted the anti-retaliation protections to extend to any individual ho engages in the whistleblowing activities described in Section 21F(h)(1)(A), irrespective of whether the individual makes a separate report to the Commission”

and noted

“an “objective” of the rulemaking was “to support, not undermine, the effective functioning of company compliance and related systems by allowing employees to take their concerns about possible violations to appropriate company officials first while still preserving their rights under the Commission’s whistleblower program….The Commission’s final rules were carefully calibrated to achieve this objective by providing “strong incentives” for individuals in appropriate circumstances to report internally in the first instance….[The final rules] incentivize whistleblowers to utilize their companies’ internal compliance and reporting systems when appropriate.”

As described in an earlier post, corporations should generally support such a position, as doing otherwise would encourage employees to go straight to the SEC with any concerns and deprive the company of the ability to handle the matter properly without SEC involvement.

About the author

Renee Howdeshell

Renee Howdeshell is a founding member of Fulcrum Inquiry, an accounting, finance and economic consulting firm that performs damage analyses for commercial litigation, forensic accountings, royalty & distribution audits, financial investigations, and business valuations. Ms. Howdeshell holds a degree in Finance and Marketing from the University of Virginia's McIntire School of Commerce and is a Certified Public Accountant (CPA) and a Certified Fraud Examiner (CFE). She has testified as an expert witness in federal court, CA state court and arbitration regarding the results of her work. She can be reached at (213) 787-4112 and her resume is available at www.fulcrum.com.

Permanent link to this article: http://betweenthenumbers.net/2014/03/sec-defends-internal-company-whistleblowers/

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>