The Chief of the Securities and Exchange Commission (“SEC”) Office of the Whistleblower, Sean McKessy, spoke last week at an American Bar Association event on whistleblower programs. As we’ve discussed previously on this blog, Mr. McKessy has previously expressed his interest in involving the agency in taking action against employers that terminate or otherwise retaliate against SEC whistleblowers. According to the Wall Street Journal’s Risk and Compliance blog, Mr. McKessy announced at last week’s conference that the SEC was currently investigating allegations of SEC whistleblower retaliation and “actively marketing” the idea of the agency directly enforcing the whistleblower-protection provisions of the Dodd-Frank Act. Mr. McKessy included a cease and desist order or a monetary sanction among the actions the SEC might take to punish firms found to have illegally retaliated against whistleblowers.
According to David J. Marshall, a partner at the whistleblower law firm of Katz Banks Kumin, who has represented many whistleblowers both in whistleblower submissions to the SEC and in actions for violations of the whistleblower protection provisions of the Dodd-Frank Act and the Sarbanes-Oxley Act, it was encouraging to see the SEC Whistleblower Office take such an aggressive tack under Mr. McKessy’s leadership: “The integrity of financial institutions is crucially important to the financial stability of the economy. In light of that, every step the SEC can take to protect SEC whistleblowers and ensure that they are able to report wrongdoings – or even perceived wrongdoings – without fear of reprisal is similarly important. Mr. McKessy’s aggressive pursuit of additional enforcement tactics against companies that retaliate against whistleblowers is extremely encouraging.”