Posted by Kyoko Takahashi Lin, Robert Cohen, and Sidney Bashago, Davis Polk & Wardwell LLP, on
Dodd-Frank, enforcement, SEC, Whistleblowers
More from: Kyoko Lin, Robert Cohen, Sidney Bashago, Davis Polk
Kyoko Takahashi Lin, Robert A. Cohen, and Sidney Bashago are Partners at Davis Polk & Wardwell LLP. This post is based on a Davis Polk memorandum by Ms. Lin, Mr. Cohen, Ms. Bashago, Fuad Rana, and Veronica Wissel.
The SEC announced the settlement of enforcement actions against seven companies, stemming from the use of employment and related agreements that allegedly violated Dodd-Frank whistleblower protection rules. Two of the agreements were consulting agreements, demonstrating that whistleblower protection for all persons, not just employees, is a priority for the SEC’s Enforcement Division.
The SEC continues to scrutinize provisions in employment agreements, separation agreements and other similar documents that, according to the SEC, discourage individuals from reporting possible securities law violations. On September 9, 2024, the SEC announced seven settled enforcement actions stemming from alleged violations of the whistleblower protection rule. In all cases, the SEC alleged the employee’s or consultant’s waiver of their right to seek a monetary award from a governmental agency was a violation of whistleblower protections, notwithstanding explicit provisions in the relevant agreements stating that the employee or consultant was not...
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