Head of SEC Whistleblower Office Warns against Interference with Potential Whistleblowers
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- The Chief of the SEC’s Office of the Whistleblower, Sean McKessy, recently warned corporate counsels against drafting contracts that attempt to dissuade would-be whistleblowers from reporting company wrongdoing to the SEC. McKessy stated that the SEC will scrutinize employee agreements that condition certain benefits on not reporting activities to regulators and specifically warned corporate counsel about drafting such provisions—reminding them of the SEC’s power to bar a lawyer from practicing before the Commission.
- There exists some uncertainty around how broad confidentiality clauses and non-disparagement clauses will be interpreted by the SEC, so companies should be cautious about drafting and enforcing broadly-worded confidentiality or other provisions, particularly where there is a chance that the enforcement of those provisions might be viewed as impeding a purported whistleblower’s ability to report conduct to the SEC or other regulatory bodies.