What: On June 22, 2022, the Securities and Exchange Commission (SEC) settled charges against The Brink's Company (Brinks) for requiring employees to sign confidentiality agreements that prohibited disclosure of any financial or business information to third parties without prior notification to Brinks, threatened liquidated damages and legal fees for noncompliance, and did not contain any exemption for whistleblowing activity. Combined with a much larger resolution a few days later, the SEC has made clear that, in assessing penalties, it will be focusing on the role of gatekeepers, including in-house counsel, in advising their clients.
Settlement Summary: Last week, the SEC announced that it settled charges against Brinks for interfering with potential whistleblowers through restrictive confidentiality agreements in violation of Exchange Act Rule 21F-17(a). Enacted in 2011, Rule 21F-17(a) prohibits any person from taking any action to impede an individual from communicating directly with the SEC, including by “enforcing, or threatening to enforce, a confidentiality agreement.” The Brinks settlement is especially significant because it reveals the Commission’s belief that the ubiquitous client alert is sufficient to put companies on notice of problematic conduct.
The SEC Order asserts that between April 2015 and April 2019, Brinks required almost all of its new hires (2,000 – 3,000 individuals annually) to sign a Confidentiality and Non-Competition Agreement...
The Kroger Sued for False Advertising case is raising fresh concerns about transparency in supermarket meat departments, as Animal Outlook accuses the retail giant of misleading in-store marketing...