Best described as the Madoff-Enabling Law, the Grimm Act will:
- Punish employees who disclose violations of the Securities Exchange Act directly to the Securities and Exchange Commission (SEC). The Grimm Act forces whistleblowers to inform corporate wrongdoers that they are violating the law before contacting law enforcement, giving the wrongdoers the opportunity to hide their misconduct from investors.
- Strip the Securities Exchange Act of the current mandatory rewards provisions designed to encourage employees to risk their careers and expose large multi-million dollar, corporate fraud against shareholders.
- Allow corporations to use limitless shareholder funds to oppose whistleblowers, while imposing burdensome restrictions on the rights of corporate whistleblower employee to hire their own attorneys.
- Explicitly authorize corporations to establish "employment agreements" and "codes of conduct," restricting the right of employees to notify investors or the SEC about potential fraud. Firing whistleblowers under these newly established corporate codes "shall not constitute retaliation."
- Require the SEC to notify the company that it is being investigated, tipping off the wrongdoers.
NWC Advocacy Associate Owen Dunn elaborated on the threats to whistleblowers contained in the Grimm Act in the Whistleblower Protection Blog entry, "7 Ways the Grimm Act Will Help Wall Street Steal." Guest Columnist Donna Boehme also discussed the dangerous Grimm Act in her blog entries, "The Sky Has Not Yet Fallen," and "Wal-Mart. Whistleblower. Whitewash. Talk Amongst Yourselves."
The Grimm Act is perhaps the most anti-investor bill ever proposed. It would destroy important reforms contained in the Sarbanes-Oxley Act of 2002 and the Dodd-Frank Act of 2010 and strip corporate employees of their ability to expose fraud.
A report by the National Coordinating Committee for Multi-Employer Plans (representing over 10 million workers, retirees, and their families) shows how widespread fraud is on Wall Street and the compelling need to protect employees who risk their careers blowing the whistle on fraud against shareholders.
Please contact your representatives in Congress and ask them to strongly oppose the anti-whistleblower provisions in the Grimm Act.
The list of organizations who have come out in opposition to the Grimm Act is long and varied. To add your organization to this list, please contact us.
- American Library Association
- Americans for Financial Reform
- Association of Research Libraries
- Center for Financial Privacy and Human Rights
- Center for Media and Democracy
- Citizens for Responsibility and Ethics in Washington (CREW)
- Common Cause
- Consumer Action
- Consumer Federation of America
- Defending Dissent Foundation
- FAA Whistleblowers Alliance
- Fund for Constitutional Government
- Government Accountability Project (GAP)
- National Whistleblowers Center (NWC)
- Neighborhood Economic Development Advocacy Project (NEDAP)
- New Jersey Action
- OMB Watch
- Project On Government Oversight (POGO)
- Public Citizen
- Service Employees International Union (SEIU)
- Taxpayers Protection Alliance
- U.S. PIRG
- Voices for Corporate Responsibility
- Whistleblowers Support Fund