Lawyers in our firm are being contacted on a recurring basis by individuals reporting wrongdoing at their work place. These so-called whistleblowers often lose their jobs and are personally maligned for simply trying to do the right thing. Thankfully, the Security and Exchange Commission now seems to be taking a more protective posture toward whistleblowers. A recent article in JDSupraLawNews noted:
SEC Regional Office Director David Bergers recently emphasized the importance of a company’s whistleblower policy when deciding whether to file an enforcement action against a company. Bergers made his comments at an internal investigations panel on December 7, 2012 sponsored by the Massachusetts Lawyers Weekly. For more information about the panel, see Martha Kessler, “Bergers Tells Issuers to Preserve Data Upon Learning of Possible Investigation,” Bloomberg Securities Regulation & Law Report, 44 SRLR 2280 (Dec. 17, 2012).
Bergers noted that a company should show the SEC that it takes whistleblowers seriously, even if a particular whistleblower has issues that the company believes undermine his or her credibility. Bergers said that the SEC wants “to see that the company is taking their concerns seriously, and how they are talking about them.” The SEC wants to know, according to Bergers, that the company is “separating [the allegations] from whatever or whoever is making them.” The company that acknowledges that there has been a whistleblower complaint, but tells the SEC “first let us give you the employment file” may find itself at odds with the SEC’s approach to a whistleblower’s concerns. Although the SEC will consider information about the whistleblower, including material in an employment file, Bergers noted that the agency “is primarily interested in what the company does with the whistleblower’s allegations and how it treats the whistleblower.”
Hopefully the SEC’s position will embolden more whistleblowers to report illegal activities. If you need additional information on whistleblower litigation, contact Scarlette Tuley, a lawyer in our Consumer Fraud Section, at 800-898-2034 or by email at Scarlette.Tuley@beasleyallen.com.
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