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Showing 2 posts in SEC.

CEO Does Not Get Whistle Blower Protections for His Opinions

In order to get whistleblower protection under the Sarbanes-Oxley Act of 2002, whistleblowers have to subjectively believe that fraud was occurring, their belief has to be reasonable, and they have to make a report to the Securities and Exchange Commission. The Seventh Circuit recently reaffirmed these conditions for legal protection in deciding that the former CEO of Orion Energy System, Inc. was not entitled to federal whistleblower protection in Verfuerth v. Orion Energy System, Inc., decided on January 11, 2018. More ›

SEC Charges More Public Companies for Confidentiality Agreements That Might Deter Whistleblowers

In the past two years, the SEC has charged six public companies with violating SEC Rule 21F-17, which prohibits confidentiality agreements that could impede employees from making whistleblower claims directly to the SEC. Since the Employment Law Observer reported on the SEC’s first case attacking a confidentiality agreement., the SEC has charged five more companies with Rule 21F-17 violations. In each case, the employer had confidentiality or severance agreements that either: (a) purported to limit the types of information that an employee may convey to the SEC or other authorities; or (b) required departing employees to waive their rights to any individual monetary recovery in connection with reporting information to the government. The employers settled the cases by, among other things, amending the agreements and paying a significant civil penalty. More ›

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