Morgan & Morgan
The SEC Whistleblower Program: Enter stage right.
The beauty of the whistleblower provisions of the Dodd-Frank Wall Street Reform Act is its simplicity. This type of beauty is rare in federal law. At its core, an employee can report corporate bribery to the SEC. Based upon this whistleblower report, the SEC can now issue a subpoena to the corporate entity asking for records to further prove or disprove the whistleblower claim. Of course, the employee is incentivized to provide detailed, important information as the quantity of the whistleblower reward depends on the quality of the information he provides to the SEC.
In sum, it is the exact tool prosecutors have been asking for over the last 35 years. Now, the SEC can cut right to the chase; it can subpoena relevant documents only and not subject itself to massive document reviews. It can surgically depose company witnesses. It can immediately focus on the critical accounting entries and practices of a company. The SEC Whistleblower Program gives real bite to the FCPA.
This simplicity troubles large corporations.
Corporate minions (lobbyists and large law firms) are now actively seeking to reinsert complexity and confusion back into anti-bribery cases.
Here is a collection of recent arguments and proposals made by these groups, both in public position papers and directly to the SEC, many of which are advocated by the U.S. Chamber Institute for Legal Reform’s “Restoring Balance: Proposed Amendments to the Foreign Corrupt Practices Act”:
Let’s hope that the SEC, when developing rules and procedures to enforce the SEC Whistleblower Program does not dilute the simplicity and inherent power of the law.