Securities and Exchange Commission

Washington, D.C. December 22, 2015. On December 8, 2015, the Eastern District of Tennessee dismissed a whistleblower’s claims, finding that the Plaintiff was not entitled to protection under the whistleblower provisions of the Dodd-Frank Act. Verble v. Morgan Stanley Smith Barney LLC et al., 3:15-cv-00074 (E.D. Tenn. Dec. 8, 2015).  The court’s decision further divides the split amongst circuits regarding the scope of the Dodd-Frank’s whistleblower protection provision.
Continue Reading Court Ruling Threatens Internal Compliance Programs

On August 4, 2015, the Securities and Exchange Commission (“SEC”) issued an interpretive rule to dispel confusion over whether employees who only report violations to their employer are protected by the Dodd-Frank whistleblower protection provision. The SEC will formally publish this interpretative rule in the Federal Register and it will operate as an amendment to the Dodd-Frank whistleblower rules. A copy of the SEC’s interpretative ruling can be found here.
Continue Reading SEC Says Employees Protected For Internal Whistleblowing

Washington D.C., July 17, 2015: Today the Securities and Exchange Commission (SEC) announced that it paid a whistleblower award of more than $3 million. The company insider whose information helped the SEC crack a complex fraud, received the third highest award to date under the SEC’s whistleblower program.

Stephen M. Kohn, Executive Director of the National Whistleblower Center praised the award stating “Paying monetary rewards to whistleblowers is the best way to ensure that the top management of publicly traded companies understand that there is a new ‘cop on the block.’ Those new cops are their own employees, who can now work side-by-side with SEC investigators in documenting violations of law. Granting large public rewards is the single best tool the SEC has to send this message.” 
Continue Reading Third Largest SEC Whistleblower Award Issued

On July 8, 2015, the Securities and Exchange Commission (SEC) issued a final rule regarding its Freedom of Information Act (FOIA) regulations. The SEC was considering imposing a 30-day time limit in which to file an appeal under FOIA. Instead, the SEC extended the time frame to 90 days.

National Whistleblower Center General Counsel David K. Colapinto submitted comments to the SEC regarding the proposed 30-day time limit. The SEC refers to Mr. Colapinto’s submission in the discussion of the final rule stating that he, “objected to the imposition of a 30 day time frame in which to file an appeal as too short and asserted that it ‘does not afford individuals (such as whistleblowers and individual investors) sufficient time to find legal representation or to file a substantive appeal.’”
Continue Reading Deadline for FOIA Appeals at SEC Extended to 90 days

The SEC Office of the Whistleblower post Notices of Covered Action where a final judgment or order, by itself or together with other prior judgments or orders in the same action issued after July 21, 2010, results in monetary sanctions exceeding $1 million. Subject to the Final Rules, individuals who voluntarily provided the Commission with original information after July 21, 2010 that led to the successful enforcement of a covered action listed below are eligible to apply for a whistleblower award.Once a Notice of Covered Action is posted, individuals have 90 calendar days to apply for an award.

View the updated list below:

Continue Reading April 2015 Whistleblower Awards List

On April 28, 2015, the Securities and Exchange Commission announced an award to a whistleblower of $600,000. The whistleblower was given the award for providing key original information that led to a successful enforcement action in connection with In the Matter of Paradigm Capital Management, Inc. and Candace King Weir, File No. 3-15930 (June 16, 2014). The whistleblower in this matter suffered unique hardships, including retaliation, as a result of reporting to the SEC.

The SEC charged Paradigm with retaliating against the whistleblower after the firm learned that the whistleblower reported potential misconduct to the Commission.  Paradigm immediately engaged in a series of retaliatory actions against the whistleblower including removing the whistleblower from the whistleblower’s then-current position, tasking the whistleblower with investigating the very conduct the whistleblower reported to the SEC, changing the whistleblower’s job function, stripping the whistleblower of supervisory responsibilities, and otherwise marginalizing the whistleblower.      
Continue Reading Whistleblower Received $600,000 from SEC

Chicago, IL.  April 30, 2015.  Today SEC Chair Mary Jo White gave a major public presentation endorsing the SEC whistleblower program and explaining how whistleblowers now play a central role in protecting U.S. financial markets.

Stephen M. Kohn, executive director of the National Whistleblower Center, made the following statement in regard to Ms. White’s remarks:

“Chair White’s endorsement of the whistleblower program is a milestone for whistleblower protections.  From her vantage point as America’s top securities regulator, she has witnessed the effectiveness of whistleblowing and the key role it plays in the enforcement of anti-fraud laws.”

Continue Reading SEC Chair Praises Agency’s Whistleblower Program

The SEC Office of the Whistleblower post Notices of Covered Action where a final judgment or order, by itself or together with other prior judgments or orders in the same action issued after July 21, 2010, results in monetary sanctions exceeding $1 million.Subject to the Final Rules, individuals who voluntarily provided the Commission with original information after July 21, 2010 that led to the successful enforcement of a covered action listed below are eligible to apply for a whistleblower award.Once a Notice of Covered Action is posted, individuals have 90 calendar days to apply for an award.

View the updated list below:  
Continue Reading March 2015 SEC Whistleblower Awards List

SEC Investigation into overly restrictive non-disclosure agreements was triggered by complaint filed by former KBR Contractor Harry Barko

Washington, D.C. , 2015.  April 1, 2015.  Today the U.S. Securities and Exchange Commission sanctioned defense contractor KBR for requiring its employees to sign restrictive non-disclosure agreements that prohibited employees from properly reporting fraud and misconduct to

The SEC Office of the Whistleblower post Notices of Covered Action where a final judgment or order, by itself or together with other prior judgments or orders in the same action issued after July 21, 2010, results in monetary sanctions exceeding $1 million.Subject to the Final Rules, individuals who voluntarily provided the Commission with original information after July 21, 2010 that led to the successful enforcement of a covered action listed below are eligible to apply for a whistleblower award.Once a Notice of Covered Action is posted, individuals have 90 calendar days to apply for an award.

View the updated list below:  
Continue Reading February 2015 SEC Whistleblower Awards List