New SEC Rule 21F-17 threatens confidentiality agreements

9 June 2011

For whistleblowers and their (past or present) employers, one of the more important features of the SEC’s new whistleblower program regulations is Rule 21F-17 (copied in part below).  Over the years, targets of whistleblower claims have employed increasingly aggressive and sophisticated tactics — including “gag orders,” TROs, and breach of confidentiality agreement or even trade-secret-theft […]

Read more →

Dodd-Frank & SEC Whistleblowers: What’s in it for you?

8 June 2011

Thinking of blowing the whistle on securities or commodities fraud?  It may make sense to do so, thanks to H.R. 4173, the Dodd-Frank Wall Street Reform and Consumer Protection Act (signed into law in July 2010) and related SEC and CFTC regulations. The SEC’s whistleblower statute — found in H.R. 4173, Section 922 (also known […]

Read more →

Employer fires whistleblower’s fiance: illegal retaliation?

27 May 2011

Retaliation is an unfortunate though predictable side effect of blowing the whistle on corporate wrongdoing.   Most whistleblowers know to expect retaliation.  Most also think — or hope — that retaliation is illegal and that they can “get justice” by suing.  Sometimes they can. Some whistleblower laws — the False Claims Act, Dodd-Frank SEC Whistleblower Program, […]

Read more →

SEC issues final Whistleblower Program regs

26 May 2011

Yesterday, the Securities and Exchange Commission issued long-awaited regulations implementing the Dodd-Frank Act’s securities whistleblower provisions.  These provisions are now codified in Section 21F of the Securities Exchange Act of 1934. The SEC’s Final Rule announcing the regulations consumes 305 pages, including explanatory material and five footnote citations to your correspondent. The regulations themselves, codified […]

Read more →

Why Sean McKessy to lead SEC Whistleblower Office?

21 February 2011

Last Friday, the SEC announced that Sean McKessy has been appointed head of the new SEC whistleblower office.   McKessy comes to the SEC from Caterpillar, Inc., where he worked as securities counsel.  He has also served as corporate secretary for Altria Group, Inc. and AOL Inc.  At all three companies, McKessy was responsible in part […]

Read more →

Predicting SEC fraud: Look for CEOs with in-the-money stock options

19 February 2011

Since August 2010, the DJIA is up 2,300 points or roughly 23 percent.  How much of the rise is real and how much is due hidden financial reporting “irregularities”?  What is the best predictor of financial statement fraud? SEC whistleblowers take note: A 2007 study* found “that CEOs with substantial amounts of in-the-money options are […]

Read more →

Sharing PHI with attorneys: OK under HIPAA?

21 December 2010

The single largest group of health care whistleblowers are health care workers themselves — nurses, doctors, dentists, therapists and billing professionals — who encounter fraud on the job.  Do such health care workers violate HIPAA by disclosing patient protected health information (“PHI”) when blowing the whistle?  There is no need for them to do so.  […]

Read more →

2009: for IRS whistleblowers, not a banner year

16 December 2010

The IRS has — at long last — published its fiscal year 2009 whistleblower program results.   As in 2008, the input stats are impressive but the output stats … well, um, there aren’t any.  Since the Section 7623(b) program’s official start in January 2007, not a single whistleblower has yet received an award.  While […]

Read more →

NJ Supreme Court: Whistlebowers can copy employer documents

3 December 2010

Can an employee whistleblower legally copy, retain and use for whistleblowing purposes confidential documents belonging to his or her employer?  Yesterday, this thorny question was answered “yes-under-appropriate-circumstances” by the New Jersey Supreme Court, in Quinlan v. Curtiss-Wright Corporation (A-51-09). In Quinlan, the Court upheld the trial court’s determination that the employee’s copying and retention of […]

Read more →

SEC delays creation of whistleblower office

3 December 2010

One month after publishing draft Rule 21F that would implement its the new whistleblower program mandated by the Dodd-Frank Reform Act, the SEC announced in today’s Open Meeting that it will be unable to create the new whistleblower office because — as fallout from President Obama’s recent announcement of a freeze on federal spending — […]

Read more →