On November 22, 2022, the US Securities and Exchange Commission (SEC or Commission) filed an amended securities fraud complaint against Adam Rogas, the former Chief Executive Officer of NS8, Inc. (NS8), alleging that, among other things, Rogas engaged in whistleblower impeding and retaliation against the NS8 employee who blew the whistle on Rogas' fraudulent conduct. The case follows In re David Hansen, a whistleblower impeding action the SEC settled against the co-founder and Chief Information Officer of NS8. As Arnold & Porter partner Jane Norberg, who was the former Chief of the SEC's Office of the Whistleblower, discussed in a recent interview with Law360, In re David Hansen was one of 16 total actions the SEC has taken against companies and individuals for violating Rule 21F-17 under the Securities Exchange Act of 1934 (Exchange Act). Rule 21F-17 prohibits anyone taking steps "to impede an individual from communicating directly with the Commission staff about a possible securities law violation, including enforcing, or threatening to enforce, a confidentiality agreement."
In the amended complaint against Rogas, the SEC alleges that the NS8 employee raised concerns about inflated customer data and falsified financial statements twice internally before submitting an anonymous whistleblower tip to the SEC. Shortly thereafter, in the midst of a dispute over office workspace, the employee again raised his concerns over the falsified financial...
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