June 06, 2011
In a move that could have serious implications for Canadian companies doing business in the United States, the U.S. Securities and Exchange Commission (SEC) is implementing provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act that authorize the bounty payment amounts that are given to whistleblowers for information about securities law violations.
Under U.S. law, preventing anyone from communicating with the SEC is a violation. The upshot is that Canadian companies risk prosecution if they attempt to stop employees from passing on tips.
Since 2002, when the U.S. Congress extended protection to whistleblowers in the Sarbanes-Oxley Act, regulators have welcomed them enthusiastically.
“Having been directed by Congress to put the Dodd-Frank program in place, the SEC will be under a great deal of pressure to ensure that whistleblower complaints are fully investigated,” says Cornell Wright.
Read the full article here.