On March 31, Senators Charles Grassley (R-IA) and Elizabeth Warren (D-MA) introduced the SEC Whistleblower Reform Act of 2022, a bipartisan bill designed to strengthen the highly successful whistleblower reward program of the U.S. Securities and Exchange Commission (SEC). The bill bolsters the program by ensuring award claims are processed in a timely manner and by strengthening anti-retaliation protections for whistleblowers.
“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 M. Kohn, founding partner of the whistleblower law firm Kohn, Kohn & Colapinto. Kohn, who is also Chairman of the National Whistleblower Center (NWC), is quoted in the senators’ press release, which also notes that the bill is endorsed by NWC and Whistleblower Network News.
The SEC Whistleblower Reform Act of 2022 ensures the timely processing of whistleblower award claims by requiring the SEC to issue an initial ruling on a claim within 1 year of the deadline to file the claim. The bill also strengthens anti-retaliation protections by extending them to whistleblowers who report violations internally to supervisors and by clarifying that whistleblowers cannot waive their rights through a predispute arbitration agreement.
“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,” said Grassley. “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.”
“The American people must have confidence that they can report violations of securities laws without retaliation from their employer,” added Warren. “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.”
The bill has strong bi-partisan support. In addition to Senators Grassley (R-IA) and Warren (D-MA), the bill is co-sponsored by Senators Susan Collins (R-ME), Raphael Warnock (D-GA) and Catherine Cortez Masto (D-NV).
Since its establishment in 2010, the SEC Whistleblower Program has allowed the agency to recover billions of dollars from fraudsters and has paid out over $1 billion to over 250 whistleblowers. At National Whistleblower Day 2021, SEC Chair Gary Gensler stated that the agency’s whistleblower program “helps us be better cops on the beat, execute our mission, and protect investors from misconduct.”