On Monday, the U.S. Securities and Exchange Commission announced the cancelation of Wednesday’s meeting on proposed changes to its whistleblower program. The meeting is expected to be rescheduled in November.

Stephen M. Kohn, chair of the National Whistleblower Center board, issued a statement: ” We welcome the postponement of the October 23rd meeting. It is vitally important that the SEC understands all of the issues and gets this rulemaking right.”

In a related development, Sen. Charles Grassley on Tuesday spoke on the Senate floor about a bill he introduced in September  that would addresses problems with the SEC proposals. Also on Tuesday, staff from the NWC delivered a petition with more than 100,000 signatures calle on the agency to reconsider the proposed changes” to the SEC whistleblower program.

In the meantime, the topic is starting to get some attention.

From Quartz:

Wall Street’s top watchdog loves to tout the success and importance of its whistleblower program.

“These awards show how critically important whistleblowers can be to the agency’s investigation and ability to bring a case to successful and efficient resolution,” said Jane Norberg, who heads the Securities and Exchange Commission’s (SEC) program, when announcing a $50 million reward for two whistleblowers in March.
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Not all the recent whistleblower news from Capitol Hill involves the president and the Ukraine.  The House last week passed a bill that would add a whistleblower protection provision to rules governing a national accounting oversight board. And on Monday, Senator Chuck Grassley (R-IA), introduced a bill that advocates say will protect whistleblowers who report financial crimes internally before going to the Securities and Exchange Commission (SEC).

That bill would address the impact of last year’s Supreme Court decision in Digital Realty Trust Inc. v. Somers.  The ruling limited protected whistleblowing to disclosures to the Securities and Exchange Commission (SEC), leaving those who report internaly vulnerable, according to Stephen Kohn, chair of the National Whistleblower Center. 
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SEC-Whistleblower-Building
U.S. Securities and Exchange Commission Photo credit Diego Radzinschi

Washington, D.C. – September 21, 2018.  The public comment period for the U.S. Securities and Exchange Commission (“SEC”) proposed amendments to the rules governing its successful whistleblower program closed on Tuesday, September 18.  More than 99% of the comments posted on the SEC’s public comment page oppose the proposed rules. 
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Later this week, the House of Representatives is set to vote on the Financial CHOICE Act. Congressman Jeb Hensarling (R – TX), Chair of the House Financial Services Committee, designed and championed this bill. The CHOICE Act will repeal major parts of the Dodd-Frank Wall Street Reform and Consumer Financial Protection Act, and deregulate U.S. financial markets. The bill also advances a toxic anti-whistleblower policy (Section 828), which would undermine the U.S. Securities and Exchange Commission’s (SEC) highly successful whistleblower program—incapacitating the most effective tool to rein in misconduct and criminal activity on Wall Street.

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Today, National Whistleblower Center Executive Director Stephen Kohn submitted testimony to the House Financial Services Committee in defense of the Securities and Exchange Commission’s (SEC) whistleblower program—a highly successful program that has protected investors and recovered $1 billion from Wall Street fraudsters since its inception.

Section 823 of the draft Financial Choice Act of 2017 directly, and negatively, impacts the whistleblower protections afforded under the Securities and Exchange Act (“SEA”).  While it purports to exclude opportunistic individuals from the SEA’s reward provisions if they are “culpable” for the violation for which they are reporting, this amendment is not needed and would undermine the SEA’s highly successful whistleblower law.


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Washington, DC, November 16, 2016. The Securities and Exchange Commission (SEC) Whistleblower Program had its most successful year to date in 2016. The agency, which issued its annual report to Congress today, reports it issued awards totaling over $57 million in 2016—higher than all award amounts issued in previous years combined. The Office of the Whistleblower (OWB) received over 4,200 tips this year, which is a more than 40 percent increase in whistleblower tips since 2012. In addition, the SEC took action in its first ever stand-alone whistleblower retaliation case.

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Washington D.C. October 9, 2016.  Och-Ziff Capital Management Group (Och-Ziff), A New York-based alternative investment and hedge fund manager, agreed to pay a combined total amount of U.S. criminal and regulatory penalties of approximately $412 million to settle charges it violated the Foreign Corrupt Practices Act.  In separate announcements yesterday the Securities and Exchange Commission (SEC) and the Department of Justice (DOJ) each described the actions of Och-Ziff which led to the charges the company violated the FCPA.
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