Show
 Whistleblowers play an important role in identifying and calling out misconduct and harm to consumers and the community. To encourage whistleblowers to come forward with their concerns and protect them when they do, the Corporations Act 2001 (Corporations Act) gives certain people legal rights and protections as whistleblowers. From 1 July 2019, the whistleblower protections in the Corporations Act have been expanded to provide greater protections for whistleblowers. This includes requiring public companies, large proprietary companies, and corporate trustees of APRA-regulated superannuation entities to have a whistleblower policy from 1 January 2020. Summary of the corporate sector whistleblower protection regimeWhistleblower protections Q&A Protections for corporate sector whistleblowers Whistleblower protections for not-for-profit organisations Information for whistleblowersWe value the people from inside companies and organisations who come to ASIC with reports of potential misconduct or breaches of the law. Whistleblowers provide ASIC with important information and help us enforce the laws we administer and address and prevent harm to consumers. We take the concerns whistleblowers raise with us seriously. ASIC has released two information sheets for people to understand who is eligible to access the whistleblower rights and protections under the Corporations Act and how we will respond to reports of misconduct from whistleblowers.
Information for companies, company officers and company auditorsCompany officers, company auditors, and other senior people within companies have obligations under the Corporations Act if they receive a report from a whistleblower. Unless these people handle the whistleblower report correctly, they may breach the Corporations Act obligations. The whistleblower protections include criminal offences and civil penalties for a person causing or threatening to cause detriment to a whistleblower or breaching a whistleblower's confidentiality, including during an investigation into the whistleblower's concerns. Read about your obligations under the whistleblower protection provisions:
Handling whistleblower disclosuresPublic companies, large proprietary companies, and corporate trustees of APRA-regulated superannuation entities must now have a whistleblower policy. Among other things, the law requires the whistleblower policy to include information about the legal protections available to whistleblowers, and how a company will investigate whistleblower disclosures and protect whistleblowers from detriment. ASIC has released Regulatory Guide 270 Whistleblower policies (RG 270) to help companies and other entities establish a whistleblower policy that complies with their legal obligations. It also contains our good practice guidance on implementing and maintaining a whistleblower policy. Even if your company is not required to have a whistleblower policy under the law, we encourage you to put in place arrangements for handling whistleblower disclosures. This can help your company comply with the obligation to preserve whistleblowers’ confidentiality and protect whistleblowers from detrimental conduct. These arrangements may form part of the governance arrangements for your company. RG 270 may also assist entities that are not required to have a whistleblower policy but are required to manage whistleblowing in accordance with the Corporations Act. Related linksWhistling while they work is a Griffith University research project looking at improving managerial responses to whistleblowing in public and private sector organisations. You can also read his speech on encouraging whistleblowers. Non-public claims and information submitted by a whistleblower must lead to a Commission enforcement action of over $1,000,000 in sanctions against a company or an individual. The range for awards is between 10% and 30% of the money collected, and cannot be lower than 10% of the sanctions obtained by the SEC, or higher than 30%. Whistleblowers are also entitled to “related action” awards, once the $1,000,000 threshold is met. Non-U.S. citizens who blow the whistle on potential securities frauds committed by publicly traded companies outside the United States are eligible to receive rewards and also those whistleblowers report violations of the Foreign Corrupt Practices Act. It’s possible for more than one whistleblower to also qualify for a reward, but the total amount of the rewards paid must not exceed 30% of the sanctions.
The SEC has awarded approximately $1.2 billion to 249 individuals since issuing its first award in 2012. Payments are made out of an investor protection fund established by Congress that is financed entirely through monetary sanctions paid to the SEC by securities law violators. No money has been taken or withheld from harmed investors to pay whistleblower awards. The Commission is more likely to follow up on SEC tips that are specific, credible, and timely. The sooner a SEC form TCR is filed, the greater the likelihood it will be forwarded to a staff member for further investigation and follow-up. The SEC Whistleblower Program and Reward law covers several types of types of fraud and wrongdoing. Potential violations may include:
To qualify for an SEC whistleblower award under the SEC Whistleblower Program, a whistleblower must submit information regarding possible securities law violations to the Commission either virtually or by mail. The SEC protects the confidentiality of all whistleblower tips, but not all tips are anonymous. If you are a whistleblower and plan to submit an anonymous tip, you must have an attorney represent you in connection with both your submission of information and your claim for an award. Your attorney’s name and contact information must be provided to the Commission at the time you submit your information. Before the Commission will pay any award to you, you must disclose your identity to the Commission and your identity must be verified by the Commission. Under the SEC Whistleblower Program, employers are prohibited from retaliating against whistleblowers for providing information to the Commission about fraud or wrongdoing that violates securities law. Retaliation may include discharging, demoting, harassing, suspending, or discriminating against a whistleblower for assisting the Commission in an investigation. If a company has wrongfully retaliated against a whistleblower, the commission may bring enforcement action against that company. If you’re thinking of blowing the whistle, we suggest contacting our experienced SEC whistleblower attorneys for a free and confidential case evaluation. Since 1998, our Washington, DC law firm has been handling some of the toughest SEC cases. We’ve prevailed in multiple SEC whistleblower reward cases, including a case in the top 10 of the highest rewards ever granted to a whistleblower. Our attorneys work on a contingency basis, so if we decide to pursue your case, there’s no fee unless we win.
Securities and Exchange Commission whistleblowers may receive a reward for reporting securities law violations if the SEC orders more than $1 million in sanctions as a result of the whistleblower’s information. SEC whistleblowers also are entitled to confidentiality and protection from job retaliation. SEC whistleblower lawyers at Phillips & Cohen can help individuals report wrongdoing confidentially or anonymously and receive a reward. Our whistleblower lawyers secured for one of our international clients an SEC whistleblower award of $32 million for information and assistance that exposed and stopped a massive securities fraud. It is one of the largest SEC whistleblower rewards made under the Dodd-Frank program. We also represented several other clients who received SEC whistleblower awards as well as others who have pending whistleblower claims. SEC whistleblower claims that have been filed with the SEC make a range of allegations, including accounting fraud, mispricing of stock, insider trading, money laundering and violations of the Foreign Corrupt Practices Act (FCPA). Both US citizens and foreign nationals may file SEC whistleblower claims and receive rewards. SEC whistleblowers are responsible for enforcement actions with more than $2.5 billion in monetary sanctions. Out of that total, $1.4 billion was for disgorgement of ill-gotten gains and interest and almost $750 million has been returned to harmed investors. The SEC has awarded more than $735 million to 127 whistleblowers since issuing its first whistleblower award in 2012. The SEC set new whistleblower award records in fiscal year 2021, issuing nearly $564 million to 108 whistleblowers. Watch the video below for more information about the SEC’s blockbuster year. As whistleblower awards have grown, so have the number of whistleblower submissions. The SEC receives thousands of whistleblower submissions every year, which is why many whistleblowers choose to work with experienced whistleblower attorneys. SEC whistleblower attorneys can make the most compelling SEC whistleblower submission possible, get their clients’ submissions into SEC investigative attorneys’ hands and persuasively advocate for the highest possible whistleblower award. [Want to talk to experienced SEC whistleblower lawyers? Contact Phillips & Cohen for a free, confidential review of your matter.] The SEC whistleblower program – rewards, protection and confidentialityThe SEC whistleblower program contains three basic elements to encourage whistleblowers to come forward with information about possible securities law violations: significant monetary awards, confidentiality and anti-retaliation protections. Whistleblower rewards:Whistleblowers will receive a reward of 10 percent to 30 percent based on the monetary sanctions the SEC collects as a result of enforcement actions based on the whistleblower’s information, if more than $1 million in sanctions are ordered. If monetary sanctions exceed $1 million, recoveries in related cases by other agencies also may be counted toward the whistleblower award. In considering how high the percentage for a whistleblower should be, the SEC considers the following factors:
The money paid to whistleblowers comes from the Investor Protection Fund created by Congress and financed through monetary sanctions the SEC collects from securities law violators. No money is taken or withheld from harmed investors to pay whistleblower rewards. [Read about the SEC’s review of recent changes to whistleblower award rules.] Source: SEC Job protection:The Dodd-Frank Act specifically states that employers may not fire, demote, suspend, threaten, harass or discriminate against an individual who provides information to the SEC or assists the agency. Whistleblowers who suffer job retaliation may sue for reinstatement, double back pay and any other damages that occurred (such as litigation costs and witness fees), if they reported their allegations to the SEC before the retaliation happened. In addition, the SEC has the authority to take enforcement actions against companies that retaliate against employees because they reported a potential securities law violation. Congress granted the SEC this jurisdiction over retaliation issues for the first time by placing the anti-retaliation sections of Dodd-Frank Act into the Securities Exchange Act of 1934. Exchange Act Rule 21F-17(a) says that “[n]o person may take any action to impede an individual from communicating directly with the Commission staff about a possible securities law violation, including enforcing, or threatening to enforce, a confidentiality agreement . . . with respect to such communications.” The SEC has exercised this authority many times. One case involved a firm that essentially sidelined an employee who provided information about alleged violations that led to an SEC enforcement action. In another case, the SEC fined a company for firing an employee who had raised concerns about possible securities violations, even though the employee’s concerns turned out to be unfounded. The SEC also investigated a company’s claim that a whistleblower was fired in connection with a reduction in force. The SEC determined that in actuality, the whistleblower was terminated in retaliation for raising concerns about certain accounting practices. In each instance, the SEC imposed significant fines on the retaliating company. The SEC enforcement actions against retaliation are separate from the legal actions that whistleblowers may take if they suffer job retaliation. To make blowing the whistle easier, the Dodd-Frank Act offers a long statute of limitations, allowing whistleblowers to report financial misconduct up to 6 years from the time of the violation. However, the SEC will reduce a whistleblower’s reward if it determines that the whistleblower “unreasonably delayed” reporting the violation. SEC whistleblowers and employment contractsThe SEC has adopted a rule to punish companies that implement codes of conduct or employment contracts that would stymie their employees from reporting potential misconduct to the SEC. Rule 21-f(17)(a) states that “No person shall take any action to impede an individual from communicating directly with the Commission staff about a possible securities law violation, including enforcing, or threatening to enforce, a confidentiality agreement . . . with respect to such communications.” The SEC’s stance sends a message to potential whistleblowers that they should not feel intimidated by any threatening language in their employment contracts that suggests they are prohibited from reporting to the SEC or feel constrained by contract language from reporting potential securities law violations. The SEC has brought a number of enforcement actions under the rule. Some examples of problematic language in contracts that companies use to try to improperly muzzle and intimidate potential whistleblowers include:
If whistleblowers have signed contracts with any of those types of restrictions, they should consult with an experienced whistleblower attorney to make sure they are protected before they go to the SEC or report internally. [Questions or concerns? Contact Phillips & Cohen for a free, confidential review of your matter.] The Sarbanes-Oxley Act also provides whistleblowers protection from retaliation, but that protection isn’t as strong as it is under the Dodd-Frank Act. Read more about the differences between Sarbanes-Oxley and Dodd-Frank for SEC whistleblowers. Confidentiality for SEC whistleblowers:Whistleblowers may report fraud anonymously, as long as they have retained a lawyer to represent them. In some cases, their identities may remain unknown even to the SEC until the time comes for the payment of an award. The Dodd-Frank Act includes a provision specifically directing the SEC to keep whistleblowers’ identities confidential and prohibits the release of any information that might directly or indirectly reveal a whistleblower’s identity. “The Commission and any officer or employee of the Commission shall not disclose any information, including information provided by a whistleblower to the Commission, which could reasonably be expected to reveal the identity of a whistleblower . . . unless and until required to be disclosed to a defendant or respondent in connection with a public proceeding instituted by the Commission.” SEC whistleblower program – historyCongress created the SEC whistleblower program as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Signed into law by President Obama in 2010, the Dodd-Frank Act is a wide-reaching statute developed and enacted in response to many of the issues that led to the 2008 financial crisis. Section 922 of Dodd-Frank Act sets forth the basic structure and framework for the SEC whistleblower program. The law repealed and replaced a scarcely publicized or utilized SEC whistleblower program that applied only to insider trading cases. Prior to the Dodd-Frank Act, the Sarbanes-Oxley Act was the key whistleblower framework. Enacted in 2002 in response to stunning, massive fraud by Enron Corporation and WorldCom, Sarbanes-Oxley created criminal liabilities for chief executive officers and chief financial officers and required that companies establish internal controls and procedures for reporting possible financial misconduct. But the law has major deficiencies. It essentially relies on companies to self-police misconduct, and whistleblower protection under Sarbanes-Oxley is limited. The decade between the passage of Sarbanes-Oxley and the Dodd-Frank Act underscored to Congress that Sarbanes-Oxley was inadequate for policing securities law violations and that additional protections and incentives were needed to convince employees to report misconduct to the SEC. SEC whistleblower lawyersOne of Phillips & Cohen’s partners, Sean McKessy, founded and built the SEC whistleblower program and served as the first Chief of the SEC Office of the Whistleblower. Our firm of experienced SEC whistleblower attorneys has won 12 SEC whistleblower awards for our clients, including awards for $37 million and $32 million for international whistleblowers. We have extensive experience as whistleblower lawyers in cases involving complex financial transactions and other corporate fraud under the SEC whistleblower program as well as other government rewards programs. For instance, we represented the whistleblower who exposed yield-burning in the municipal bond market as well as a Wall Street banker who exposed fraudulent tax shelters involving more than $10 billion of taxable income. If you are aware of any significant corporate fraud, securities violations or FCPA violations and would like to discuss your options under the SEC whistleblower or CFTC whistleblower programs, please contact Phillips & Cohen’s whistleblower attorneys to discuss the matter confidentially at no charge. Posted in Resources, SEC / CFTC Resources |
The office of the whistleblower was created by the securities and exchange commission.
Pos Terkait
Copyright © 2024 ketajaman Inc.
