Recent SEC Whistleblower Cases Focus on Repressive Language in Employment Related Agreements

The SEC recently announced settlements of three enforcement actions involving alleged violations of Rule 21F‑17(a) under the Securities Exchange Act of 1934, which provides, “No person may take any action to impede an individual from communicating directly with the Commission staff about a possible securities law violation, including enforcing, or threatening to enforce, a confidentiality agreement . . . with respect to such communications.” The focus in the enforcement actions was language in employment-related agreements that could deter employees from reporting violations. This article examines the cases with insight from Holland & Knight partner Allison Kernisky. See “SEC and CFTC Received Record Number of Whistleblower Tips and Made a Record Award in 2022” (Feb. 15, 2023).

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