Washington D.C. May 11, 2011. Today at 2:00 pm EST, the Capital Market and Government Sponsored Enterprises Subcommittee of the House Committee on Financial Services will be holding a hearing on an anti-whistleblower billproposed by Congressman Michael G. Grimm (R-NY, 3rd). The bill amends the Security Exchange Act to reverse the main whistleblower protections in the Dodd-Frank and creates unprecedented sweeping restrictions on the ability of employees to blow the whistle on corporate fraud. Some of the most alarming features in the bill are:
- Punish employees who disclose violations of the Act directly to the Securities and Exchange Commission (SEC). It 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 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 employees 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.
Stephen M. Kohn, Executive Director of the National Whistleblowers Center stated:
*NCCMP is the National Coordinating Committee for Multiemployer Plans, a non-partisan Washington, DC-based non-profit, which monitors, legislative, regulatory and legal developments affecting multiemployer pension and health and welfare plans in various industries.