The SEC voted to propose amendments to the rules governing its whistleblower program. These amendments address, in part, the Supreme Court’s decision in Digital Realty Trust, Inc. v. Somers, which held that the Dodd-Frank Act’s whistleblower anti-retaliation provisions only apply where a securities violation is reported to the SEC itself. With respect to whistleblower retaliation protection, the proposed rules would require an individual to report information about possible securities laws violations to the Commission ... Continue Reading
The Supreme Court held that the Dodd-Frank Act’s whistleblower anti-retaliation provisions only apply where a violation of the securities laws is reported to the SEC, and do not extend to situations in which the violation is reported only internally. In so holding, the Court resolved a circuit split that had left uncertainty over the scope of the provisions. Individuals who report to the SEC remain covered by the provisions, which allow immediate access to federal ... Continue Reading
The SEC’s Division of Enforcement announced its “Share Class Selection Disclosure Initiative,” offering favorable settlement terms to investment advisers who self-report potential violations relating to certain mutual fund share class selection issues and promptly return money to harmed clients. Qualifying self-reporting advisers will be eligible for a recommendation from the Division of Enforcement that the Commission accept a settlement imposing a cease-and-desist order, disgorgement with prejudgment interest, and various undertakings, but not imposing a civil ... Continue Reading
In July, the SEC announced two whistleblower awards exceeding $1 million. In one case an employee of a government agency was awarded $2.5 million for providing a tip and further assistance that allowed the SEC to address a company’s alleged misconduct. In the second case, a company insider received $1.7 million for providing information that helped the SEC pursue an investigation and enforcement action to address the company’s alleged fraud.