The SEC Whistleblower Reform Act will be reintroduced in the next Congressional session, Congressional sources have confirmed with WNN. It is still unclear whether the bill will be identical or adjusted to the version introduced in 2023.
Senators Chuck Grassley (R-IA) and Elizabeth Warren (D-MA) introduced the 2023 version of the bill in order to further strengthen the highly successful SEC Whistleblower Program. Although the program has been a remarkable success, court rulings such as Digital Realty Trust v. Somers have increased the risk of employee retaliation for whistleblowers.
The SEC Whistleblower Program’s mandatory whistleblower awards, strong anti-retaliation protections, and anonymous reporting channels have proven to be immensely successful in incentivizing whistleblowers with high-quality information about fraud and misconduct to come forward and cooperate with U.S. authorities. Since it was established in 2010, the program has recovered over $6.3 billion in sanctions from fraudsters, allowing over $1.5 billion to be returned to harmed investors.
Since the Digital Realty ruling in 2018, however, whistleblowers who report internally and not directly to the SEC are no longer covered by the program’s anti-retaliation provisions. The reform introduced by Senator Grassley, which his office confirmed will be reintroduced in some form next session, would reverse the consequences ensuring that internal whistleblowers can have whistleblower protections.
The bipartisan SEC Whistleblower Reform Act also further strengthens the program by addressing the long delays in granting awards as well as making sure that nondisclosure agreements do not silence whistleblowers.
Former SEC Commissioner Allison Herren Lee, who now serves as Of Counsel at the whistleblower defense firm Kohn, Kohn & Colapinto, wrote an article calling for the passage of the bill.
“The SEC Whistleblower Reform Act reflects a bipartisan consensus that a strong whistleblower program benefits investors, companies and the public,” Lee writes. “The program has helped uncover — and remediate –serious and costly frauds that might never have otherwise come to light. Having worked in law enforcement for over a decade, and then as an SEC Commissioner helping to oversee the SEC’s Office of the Whistleblower, I know firsthand the value of continued investment in this highly successful program. I hope Congress will act quickly to pass this important legislation.”
National Whistleblower Center has issued an Action Alert allowing individuals to write to Congress calling for the passage of the bipartisan SEC Whistleblower Reform Act.
Join NWC in Taking Action:
Reform the SEC Whistleblower Program
Further Reading:
The Bipartisan SEC Whistleblower Reform Bill: Building on Success
