On May 22, the Securities and Exchange Commission (SEC) announced a settled enforcement action against Foot Locker, Inc. for using separation agreements that required departing employees to waive their right to receive SEC whistleblower awards, in violation of Exchange Act Rule 21F-17(a). The case is noteworthy not only for its specific facts, but also because it reflects clear continuity in the SEC’s whistleblower-enforcement agenda: after bringing a significant number of Rule 21F-17 cases under prior Chair Gary Gensler, this Foot Locker order is the first such action under Chair Paul Atkins and signals that the current Commission will continue to prioritize whistleblower protections.
Congress created the SEC’s whistleblower program in § 21F of the Exchange Act, added by the Dodd-Frank Act in 2010, to encourage individuals to report potential securities law violations by offering financial incentives and anti-retaliation protections. To implement that mandate, the SEC adopted Rule 21F-17 in 2011, which prohibits companies from taking any action, including through confidentiality or severance agreements, that could impede individuals from communicating directly with the SEC staff about possible violations or from benefitting from the whistleblower program.
The Foot Locker Order
According to the SEC, from at least July 2020 through June 2024, approximately 148 departing senior executives and employees in finance, legal, supply chain, and operations signed separation...
Prosecutors concluded that claims alleging President Lee Jae Myung was sent to a juvenile detention center as a teenager were false. An indictment filed by prosecutors against Morse Tan stated tha...