Sens. Chuck Grassley (R-Iowa) and Elizabeth Warren (D-Mass.) have introduced legislation to strengthen whistleblower protections at the U.S. Securities and Exchange Commission (SEC). Their bipartisan proposal, the SEC Whistleblower Reform Act of 2022, would ensure claims are processed in a timely manner. If passed, it would also implement new measures to prevent retaliation against whistleblowers.
“SEC whistleblowers are critical for rooting out fraud and protecting investors, and those who often put their career at risk to report wrongdoing should be shielded from retaliation. While I’m pleased that the program has been an overwhelming success, we can still do more to strengthen protections, speed up claim processing and close other loopholes,” Grassley said.
“The American people must have confidence that they can report violations of securities laws without retaliation from their employer. That is why I am glad to partner with Senator Grassley to introduce the SEC Whistleblower Reform Act of 2022 to expand and strengthen whistleblower protections,” said Warren.
Grassley and Warren’s bipartisan proposal has been endorsed by the National Whistleblower Center, the Whistleblower Network News and many other groups.
“This law is urgently needed. Whistleblowers who have been fired often have to wait over four years for any compensation. This amendment closes that painful loophole,” said Stephen Kohn, chairman of the National Whistleblower Center.
Specifically, the SEC Whistleblower Reform Act of 2022 seeks to:
- Protect whistleblowers from retaliation if they report violations to a direct superior. Currently, they are only protected if they report directly to the SEC or certain select officials.
- Ensure that claims and awards are processed in a timely manner. Although the SEC has been improving, they have previously had a backlog that was several years long.
- Clarify that whistleblowers cannot waive their rights through a predispute arbitration agreement.
Sens. Catherine Cortez-Masto (D-Nev.), Susan Collins (R-Maine) and Raphael Warnock (D-Ga.) are also cosponsors of the legislation.
In 2010, Grassley helped create the SEC’s whistleblower program. It has been a successful, receiving over 52,000 tips and collecting over $4.8 billion in fines as of 2020. Recently, SEC Chair Gary Gensler also credited Grassley’s work on the whistleblower program as one of the best ways to hold people accountable and help ensure the integrity of the stock market.
Read the full text of the bill by clicking HERE.