Republicans in the House of Representatives have proposed a radical anti-whistleblower bill (the Grimm bill) that, if passed, will completely undermine the ability of corporate whistleblowers to expose fraud and violations of securities laws.
Best described as the Madoff-Enabling Act, the proposed House Republican Amendments to the Securities Exchange Act will:
- Punish employees who disclose violations of the Acts directly to the Securities and Exchange Commission (SEC). It forces whistleblowers to inform corporate wrongdoers that they are violating the law before contacting law enforcement, giving the wrongdoers the opportunity to hide their misconduct from investors.
- Strip the Act of the current mandatory rewards provisions designed to encourage employees to risk their careers and expose large multi-million dollar, corporate fraud against shareholders.
- Allow corporations to use corporations to use limitless shareholder funds to oppose whistleblowers, while imposing burdensome restrictions on the rights of corporate whistleblower employee to hire their own attorneys.
- Explicitly authorize corporations to establish "employment agreements" and "codes of conduct," restricting the right of employees to notify investors or the SEC about potential fraud. Firing whistleblowers under these newly established corporate codes "shall not constitute retaliation."
- Require the SEC to notify the company that it is being investigated, tipping off the wrongdoers.
This bill is perhaps the most anti-corporate whistleblower bill ever proposed. It would destroy important reforms contained in the Sarbanes-Oxley Act of 2002 and the Dodd-Frank Act of 2010 and strip corporate employees of their ability to expose fraud.
Did the new House leadership forget about the frauds? Have they forgotten there was a Wall Street meltdown? Did they forget that whistleblowers were fired? Did they forget that the SEC failed to do its job?
A report by the National Coordinating Committee for MultiEmployer Plans(representing over 10 million workers, retirees, and their families) shows how widespread fraud is on Wall Street and the compelling need to protect employees who risk their careers blowing the whistle on fraud against shareholders.
A hearing is scheduled for Wednesday, May 11th at 2:00 p.m. and in the weeks to follow it will go through the markup procedure. If this bill goes through markup, it could be attached to ANY bill. The markup must be prevented. Please contact your representatives in Congress and ask them to strongly oppose the anti-whistleblower provisions in the Grimm bill.
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