Directors Urged to Submit Comment to SEC on Whistleblower Provisions

by Sara Jane Shanahan and Jason L. Drori for Boardmember, December 2010.

With the approach of the December 17th deadline to comment on the Securities and Exchange Commission’s proposed rule to pay bounties to whistleblowers, now is the time for directors to voice their opinion on the proposal. It also is imperative for directors to satisfy themselves that their companies’ ethics and compliance program are up to date.

The SEC’s whistleblower proposal is the result of a directive contained in this summer’s Dodd-Frank Wall Street Reform and Consumer Protection Act. It allows the Commission to pay a bounty of up to 30 percent to a whistleblower who provides “original information’’ about securities law violations.

Critics argue that passage of the SEC proposal, in its current form, would undermine the years of work that companies have put in to creating internal whistleblower channels—as directed by the 2002 Sarbanes-Oxley Act—by encouraging employees to go straight to the SEC with suspicions of wrongdoing. At a time when regulators have reached numerous million and billion-dollar settlements following high-profile scandals involving fraud and violations of anti-bribery and corruption laws, the allure of a 30 percent bounty creates an enormous incentive for whistleblowers to do just that. (continue reading… )

 

Advertisements

0 Responses to “Directors Urged to Submit Comment to SEC on Whistleblower Provisions”



  1. Leave a Comment

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s




Blog coordinator

Cefeidas Group

Archives

cgl-med-linked-in

cgl-med-linked-in
free counters

%d bloggers like this: