Dodd-Frank whistleblowers may report corporate bribery to the SEC despite confidentiality provisions in their employment and severance agreements. Current and former employees at all levels of qualifying companies are now eligible for large rewards for reporting bribery confidentially to the SEC. The Dodd-Frank reward program covers corporate violations of the U.S. Foreign Corrupt Practices Act (FCPA) by SEC-regulated companies. FCPA whistleblowers who provide information about corporate bribery of foreign government officials can receive large rewards. The SEC already has made more than $150 million in payments to whistleblowers. Current and former employees may report their companies’ securities violations, including reporting any bribes their companies may be paying or have paid to foreign officials, without worrying that they may be violating confidentiality provisions in their employment or severance agreements. SEC Rule 21F-17(a) provides as follows: “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 SEC has made clear that employees of SEC-regulated companies may report bribery to the SEC under the Dodd-Frank reward program regardless of how broad the confidentiality provisions are in the employee’s employment or severance agreement with the company. In September 2016, the SEC imposed a Cease and Desist Order against AB InBev in part for violating the “Whistleblower Incentives and Protection” provisions of Section 21F of the Dodd-Frank Act. This related to AB InBev’s decision to place broad confidentiality provisions in foreign employees’ severance agreements without explaining to those employees that the confidentiality provisions do not prevent the employees from communicating with the SEC about any securities or bribery violations committed by the company.
If anyone has a question about whether he or she is allowed to provide company-related information to the SEC in connection with the Dodd-Frank reward program, he or she should feel free to email me at firstname.lastname@example.org. For more information about the Dodd-Frank reward program, please click here. And for more details about how the reward program applies to FCPA whistleblowers, please click here.