The U.S. Securities and Exchange Commission is stepping up its approach to companies that try to create contractual obstructions to whistleblowers coming forward, according to Harris Mufson and Daniel Saperstein of Proskauer Rose in a recent post.
Quoting Rachel Louise Ensign of the Wall Street Journal, the authors note the SEC has started to request companies turn over documents such as nondisclosure agreements, confidentiality agreements and settlements that they’ve entered into post-Dodd-Frank. “This is just the latest effort by the SEC to investigate contractual impediments to whistleblower complaints,” note Mufson and Saperstein. Last year, the agency also warned in-house attorneys not to draft contracts encouraging employees to report securities fraud complaints internally instead of to the SEC.
