“Reliability and the SEC’s Whistle-Blower Program,” an article by Akin Gump litigation partner Joseph Boryshansky and associate Sofie Syed, has been published by Bloomberg BNA’s Securities Regulation & Law Report.
The article discusses the origin of the Securities and Exchange Commission’s award program for whistleblowers and the possible impact on the securities industry of employees who “are financially incentivized to investigate and report…information that might appear suspicious to them due to their lack of understanding or experience with the subject matter” or of those who might use the whistleblower program “to gain leverage in employment negotiations.”
The authors discuss the risk of unfounded reports and also sketch out existing protections, under the current framework, against frivolous or malicious reporting, which Boryshansky and Syed believe are “far from airtight.” They conclude by offering an alternative approach that would restrict monetary awards to whistleblowers who “who report suspected violations that fall within their job remit or area of responsibility. This approach would have perhaps mitigated the risk of uninformed submissions, while remaining consistent with the overall goals of the whistleblower regime.”
To read the full article, please click here.